Appliance insurance can help homeowners protect their investments so that they don’t have to shoulder the costs of repairs or replacements. This can lead to peace of mind in the event of HVAC system breakdowns, plumbing or electrical issues, or problems with other major appliances. Read our guide below to learn all about appliance insurance and whether it’s right for you.
Understanding Appliance Insurance
Appliance insurance protects homeowners from the financial burden of repairing or replacing major appliances and home systems. Learn how it differs from other types of home protection plans below.
What Is Appliance Insurance?
Appliance insurance, which is also known as a home appliance warranty, is a service contract that covers the repair or replacement of certain home appliances and systems. Appliance insurance focuses on breakdowns that result from regular use over time, as opposed to homeowner’s insurance, which protects against theft and damage from fires or storms.
How Does It Differ From Home Warranties?
Appliance insurance and home warranties are similar but not identical. Home warranties offer coverage for appliances and home systems, while appliance insurance focuses on specific items. Many providers offer plans that cover both appliances and systems under the umbrella of “home warranties,” but understanding the distinctions can help you choose the plan that best fits your needs.
Benefits of Appliance Insurance
Investing in appliance insurance is advantageous for homeowners in older homes that feature older appliances.
Peace of Mind for Homeowners
Appliance insurance offers the peace of mind that you’re protected against unexpected repair costs. This can allow you to budget more effectively for home maintenance.
Potential Cost Savings
Insurance requires an upfront cost, but it can lead to significant savings in the long run. If your furnace fails and your policy covers its replacement, for example, you could save thousands of dollars on a single claim. The cumulative cost of repairs over time can far exceed the premiums that you pay for insurance. This makes insurance a cost-effective solution for many homeowners.
What Appliance Insurance Typically Covers
Appliance insurance policies vary, but most cover a range of major appliances and home systems. Learn what home insurance covers below so that you can you choose the right plan for your needs.
Major Appliances
Standard policies usually cover kitchen appliances such as refrigerators, ovens, and dishwashers. Some plans may also include washers and dryers, though these might require additional coverage. The high cost of these appliances usually makes coverage worth the expense.
HVAC Systems
Most appliance insurance policies cover HVAC systems. This can be particularly valuable given the high cost of operating these systems. HVAC systems are essential for comfort, and their malfunction can lead to uncomfortable living conditions.
Plumbing and Electrical
Many policies extend coverage to plumbing and electrical systems, which protect against issues such as leaky pipes or faulty wiring. These systems help your home to function, and coverage can help mitigate costly repairs.
Appliance Insurance Costs and Considerations
You must weigh the costs against the potential benefits of appliance insurance to help you understand whether coverage is worth the cost for your household.
Average Premium Rates
The cost of appliance insurance varies widely depending on the provider and level of coverage. Policies typically range from $120 to $1,500 per year.
*Cost data in this article sourced from Forbes.
Deductibles and Service Fees
Most policies require a deductible or service fee for each claim. You must factor in these costs when evaluating the overall value of a policy.
Assessing Your Needs
Take inventory of your appliances and home systems. Note the age and condition of each. This will help you to determine which items are likeliest to need coverage in the near future.
Comparing Providers
Research multiple providers and compare their offerings, customer reviews, and claim processes. Look for companies that have good reputations, reliable customer service, and prompt claim resolution practices. Customer feedback can provide insights into each company’s reliability.
Reading the Fine Print
Carefully review the terms and conditions of any policy you’re considering. Pay special attention to coverage limits, exclusions, and any requirements for maintaining coverage. This will help you to understand exactly what is and isn’t covered.
Top Appliance Insurance Providers
Many companies offer appliance insurance, but the options below stand out for their comprehensive coverage and customer satisfaction.
Liberty Home Guard
Liberty Home Guard offers flexible plans with optional add-ons for additional appliances and systems. The company’s customizable plans make it easy for homeowners to get coverage that meets their needs.
American Home Shield
American Home Shield offers extensive coverage options and a wide network of service professionals, and is one of the largest providers in the industry. Their company’s breadth of coverage and reputation for being reliable makes it a popular choice.
Select Home Warranty
Select Home Warranty provides budget-friendly options that include comprehensive coverage for appliances and systems. Its plans are affordable and offer robust protection.
Common Appliance Insurance Exclusions and Limitations
Understanding what’s not covered in your plan is just as important as knowing what is covered when it comes to appliance insurance.
Pre-Existing Conditions
Most policies don’t cover issues that predate your policy. This is why you must address any issues with your appliances before buying coverage. Ignoring pre-existing conditions can lead to denied claims and unexpected costs.
Improper Maintenance
Plans don’t typically cover damage that results from neglect or improper maintenance. Maintain your appliances and systems so that your policy remains valid.
Appliance Insurance for Home Sellers
Appliance insurance can be valuable for homeowners who are looking to sell their homes. It can provide an extra incentive for potential buyers.
Using Insurance as a Selling Tool
Real estate professionals frequently recommend offering appliance insurance as a tool to help sell property. This can be especially helpful if the house is more than 10 years old, as this is when water heaters, furnaces, and other systems begin to reach the ends of their lifespans. It’s a comfort to potential buyers to know these things are covered.
Buyer Incentives
Offering a one-year appliance insurance policy can make potential buyers confident in their purchases. A policy will give them peace of mind that they’re protected against unexpected repairs in the first year of homeownership. This incentive can potentially accelerate a sale.
Tips for Maximizing Your Appliance Insurance
Consider the tips below to maximize the benefits of your appliance insurance:
Keeping Maintenance Records
Keep detailed records of the maintenance and repairs your appliances need. This documentation will be an important part of any claim you might need to file. Keeping clear records can expedite the claims process and prove you properly maintained your appliances.
Understanding Claim Processes
Familiarize yourself with your policy’s claims process. Knowing what to expect can make for a smoother experience if you do need to eventually file a claim. This can reduce stress and make it easier for you to resolve any issues.
Alternatives to Appliance Insurance
Consider the alternatives to appliance insurance below in the event this type of insurance is not right for you.
Manufacturer’s Warranties
Many appliances come with manufacturer’s warranties that may provide sufficient coverage, especially for new items. These warranties often cover defects and can serve as an excellent first line of defense.
Savings Accounts for Repairs
Some homeowners prefer to set aside money in a savings account that’s dedicated to potential repair work. This gives them more control over their funds. This approach allows you to access funding without the constraints of an insurance policy.
