Equipment breakdown coverage is likely offered on your Homeowners policy. This coverage is designed to help protect your household appliances and equipment that are essential to maintaining your household. Equipment breakdown coverage can repair or replace your appliances and equipment after a mechanical or electrical failure. Depending on your policy, it may be a cost effective solution for your household when compared to other options such as a home warranty or extended warranty on your appliances. So you may need to do some research on whether this coverage is well suited to your needs.
What is equipment breakdown coverage?
Equipment breakdown coverage can repair or replace your appliances if they stop working due to a mechanical or electrical failure. Coverage will vary from policy to policy, but you’ll generally be coverage for mechanical or electrical damage to your:
✔️ Refrigerator or freezer
✔️ Heating and cooling systems
✔️ Washer or dryer
✔️ Water heater
✔️ Oven
✔️ Microwave
✔️ Garbage disposal
✔️ Electrical power panel
✔️ Sump pump
✔️ Generator
✔️ Computer
✔️ TV and entertainment system
✔️ Security system
✔️ Other electric appliances
How does equipment breakdown coverage work?
If your covered equipment stops working due to a power surge, short circuit, motor burnout or mechanical breakdown, contact your insurer to file a claim and get repairs or get reimbursed for a replacement.
If your policy covers food spoilage, you may want to take a picture of your fridge and/or freezer to include in your claim.
Whether or not you’re covered for accidents will depend on your specific policy, so if the damage is due to an appliance being dropped, knocked over or otherwise accidentally damaged, check your policy documents before filing a claim.
What kinds of exclusions are there?
Exclusions will vary by policy, however you will generally not be covered for:
❌ Damage due to wear and tear
❌ Equipment that stops working because of age
❌ Equipment or appliances that are covered by a guarantee or warranty
❌ Appliances not kept at your insured address or residence
❌ Equipment used for a business
There may also be some additional limitations on the amount of pay out depending on how much your appliances or equipment is worth, so be sure to check your policy to know if you are covered properly.
Do I still have a deductible?
Yes, you will still have a deductible depending on the insurance provided. This deductible may be lower than your policies base deductible, however you should check your specific policy to find out.
Is equipment breakdown insurance worth it?
It will depend on your financial situation and what appliances and equipment you have. If most of your appliances and equipment are old and are prone to breaking down due to wear and tear, this extra coverage may not be worth the cost. Additionally if you have a warranty on your home for appliances and equipment it may not be worth purchasing until your home warranty expires.
But if your appliances and equipment are still in good shape, a covered claim could save you a significant amount of money if something happens — especially if they aren’t warrantied.
If you’re on the fence, I suggest writing down all of the appliances and equipment in your home that may be covered and figure out how much each piece would cost to replace. Then get a quote for coverage from your insurance agency to see if the cost of coverage is low enough to be worth it.