Haris Ashley
Homeowners insurance is a great way to protect your home and its contents, but it doesn't always cover everything. That's where add-ons or endorsements come in. Equipment breakdown coverage is an optional extra that can be added to your policy to protect your appliances and home systems in the event of sudden mechanical or electrical failure. This additional coverage can save you a lot of money when something goes wrong, as standard homeowners insurance typically won't cover appliances if they break down. For an extra $25 to $50 per year, you can safeguard your home appliances and avoid the high costs of repairing or replacing them out of pocket.
| Characteristics | Values |
|---|---|
| Type of coverage | Equipment breakdown coverage |
| Purpose | Protect against the cost of repairing or replacing appliances and systems in the event of sudden, accidental breakdowns due to mechanical or electrical failure |
| What is covered | Major appliances (e.g. refrigerators, ovens, washing machines, dryers), HVAC systems, computer equipment, home gym equipment, electronics |
| What is not covered | Normal wear and tear, fire, lightning, wind, hail |
| Cost | $25-$50 per year on average; $2/month for renters' insurance; $3/month for homeowners' or condo insurance |
| Availability | Not all insurance providers offer equipment breakdown coverage; home warranties are standalone service contracts purchased from separate companies |
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What You'll Learn
Equipment breakdown coverage
This type of coverage is generally inexpensive, costing around $25-$50 per year to add to your home insurance policy. It's important to note that equipment breakdown coverage does not cover normal wear and tear, and it is not available on all policies.
The specific equipment covered by this type of insurance varies by insurer and may include items such as refrigerators, washing machines, dryers, and AC systems. Additionally, equipment breakdown coverage can provide coverage for green upgrades, helping to pay up to 125% of the cost to replace covered equipment with more energy-efficient or environmentally friendly alternatives.
To determine if equipment breakdown coverage is right for you, consider the potential cost of repairs for your appliances and systems compared to the cost of adding this endorsement to your policy. Check with your homeowners' insurance company to see if equipment breakdown coverage is available and what specific items it covers.
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Cost of adding equipment breakdown coverage
Equipment breakdown coverage is an endorsement that can be added to your homeowners insurance policy to protect against the cost of repairing or replacing appliances and systems if they break down due to certain uncontrollable circumstances. It is important to note that equipment breakdown coverage does not cover damage caused by normal wear and tear, lack of maintenance, rust, mould, or age. Instead, it covers mechanical and electrical failures, such as power surges, short circuits, motor burnouts, and pressure system breakdowns.
The cost of adding equipment breakdown coverage to your homeowners insurance is generally low, ranging from $25 to $50 per year, according to sources like NerdWallet, The Hartford, and Hippo. This price can vary depending on the insurance company and the plan. Some insurers may offer higher coverage amounts, ranging from $10,000 to $50,000, or even more, for an additional premium. It is worth noting that equipment breakdown coverage is not available from all insurance providers, so it is important to check with your homeowners insurance company to see if it is offered.
When considering the cost of adding equipment breakdown coverage, it is essential to weigh the potential cost of repairs against the cost of the endorsement. Additionally, it is crucial to look at the limits and deductibles offered by the insurance company to ensure that you will be adequately covered in the event of a claim. For example, some insurers may offer a $500 deductible, which can be a good option if you are not concerned about smaller electronics and are more interested in protecting major appliances and systems.
Compared to home warranties, which typically cost between $300 and $600 per year, equipment breakdown coverage is a more affordable option. Home warranties cover normal wear and tear and provide protection for a set period, whereas equipment breakdown coverage focuses on mechanical and electrical failures. Therefore, adding equipment breakdown coverage to your homeowners insurance can provide added financial protection for your home's most expensive systems and appliances at a relatively low cost.
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What equipment breakdown coverage includes
Equipment breakdown coverage is an endorsement or add-on that can be added to certain homeowners' insurance policies. It is an inexpensive way to protect your home's mechanical systems and appliances, which can be costly to repair out of pocket. It covers electrical or mechanical damage to household systems and appliances, including refrigerators, freezers, ovens, dishwashers, washers, dryers, alarm systems, computers, electronics, and home entertainment systems. It can also help cover boilers and pressure system breakdowns.
Equipment breakdown coverage can help protect against the cost of repairing or replacing appliances and systems if they break down due to certain uncontrollable circumstances, such as electrical failures caused by artificially generated power surges. It is important to note that equipment breakdown coverage does not cover normal wear and tear or damage due to a lack of maintenance. Additionally, it does not cover damage from fire, lightning, wind, or hail, as these are typically covered under a standard homeowners' policy.
The cost of adding equipment breakdown coverage to your homeowners' insurance policy can vary, but it is generally affordable, with prices ranging from $25 to $50 per year. The deductible, or the amount you pay before insurance kicks in, is often $500, while the coverage limit, or the maximum amount the insurance company will pay, varies.
Equipment breakdown coverage is different from a home warranty, which is a standalone service contract purchased from a separate company. A home warranty covers the repair or replacement of specific appliances and systems listed in the contract, while equipment breakdown coverage is typically broader in scope and covers a wider range of appliances and systems. Home warranties also tend to be more expensive, costing around $300 to $600 per year.
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Home warranties vs. equipment breakdown coverage
Equipment breakdown coverage is an endorsement or add-on to your homeowners insurance policy. It covers electrical or mechanical damage to your household systems and appliances. It is an inexpensive way to protect your home's mechanical systems and appliances, which can be costly to repair out of pocket. It typically costs from $25 to $50 per year and usually has a coverage limit of $100,000 and a deductible of $500.
Home warranties, on the other hand, are standalone service contracts that must be purchased from a separate company. They cover the repair or replacement of specific appliances and systems in your home. Home warranties typically cost about $300-$600 per year or more, making them significantly more expensive than equipment breakdown coverage. They cover normal wear and tear but do not provide protection against mechanical and electrical breakdowns.
While both options provide protection for your appliances and equipment, they differ in terms of how they are purchased, what they cover, and their cost. Equipment breakdown coverage is typically broader in scope than a home warranty, covering a wider range of appliances and systems, while a home warranty covers specific items listed in the contract.
It's important to carefully read the terms and conditions of both options to understand the differences in what each covers and choose the one that best suits your needs.
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Policy add-ons
Basic homeowners insurance provides plenty of protection, but there are still some things that won't be covered. Policy add-ons can help you fill these gaps.
Equipment Breakdown Coverage (EBC), also known as Appliance Coverage, is an inexpensive endorsement that can be added to your insurance policy to protect your home appliances and systems from mechanical and electrical breakdown. This includes items such as refrigerators, ovens, washing machines, dryers, HVAC systems, boilers, and pressure systems. EBC typically costs between $25 and $50 per year, but the price can vary depending on the insurance provider.
It's important to note that EBC does not cover normal wear and tear, and only covers specific types of breakdowns. Home warranties, on the other hand, cover normal wear and tear but are typically more expensive, costing around $300-$600 per year.
Another add-on to consider is Buried Utility (BU) coverage, also known as Service Line Coverage. This covers underground utility lines, such as water, sewage, or gas lines, as well as underground wires like electrical cables or power lines on your property.
When considering policy add-ons, it's important to weigh the potential cost of repairs against the additional cost of the endorsement. It's also crucial to review the limits and deductibles of the coverage to ensure that it meets your needs.
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Frequently asked questions
Equipment breakdown coverage is an endorsement that may be added to certain homeowners insurance policies to protect against the cost of repairing or replacing appliances and systems if they break down due to certain uncontrollable circumstances.
Equipment breakdown coverage protects against electrical or mechanical damage to your household systems and appliances. This includes boilers, pressure systems, HVAC systems, refrigerators, ovens, washing machines, dryers, and more.
Equipment breakdown coverage typically costs from \$25 to \$50 per year. However, the cost may vary depending on the insurance provider and the level of coverage. Some insurers may offer equipment breakdown insurance with up to \$100,000 in coverage and a \$500 deductible.
To add equipment breakdown coverage to your homeowners insurance, contact your insurance provider and request a quote for equipment breakdown coverage. Review the terms and costs before purchasing the endorsement.
