Home Repair Insurance: Is It Worth It?

Home repair insurance, also known as a home warranty or home maintenance insurance, is an optional policy that covers the cost of repairing or replacing major home systems and appliances that break down due to everyday wear and tear. This includes mechanical items, indoor plumbing, appliances, wiring systems, and heating and cooling units. Home repair insurance is different from homeowners insurance, which covers damage caused by specific events such as fire, windstorm, hail, or lightning. While homeowners insurance may cover minor renovations, it is important to review your policy and inform your insurance company of any major renovation plans to ensure adequate coverage.

What does home repair insurance cover?

Home repair insurance, also known as a home warranty or home maintenance insurance, is an optional policy that covers the cost of repairing or replacing major home systems and appliances that break down from everyday wear and tear. This includes mechanical items, such as ceiling fans, indoor plumbing, wiring systems, and heating and cooling units. Most appliances are also covered, including washing machines, refrigerators, dryers, and microwaves.

Home repair insurance policies set specific dollar limits for certain items. For example, a policy may place a $1,500 limit on washing machines, meaning that the cost of repairing or replacing the machine cannot exceed this amount. If the machine is worth more, the policyholder will have to pay the difference.

There are three common types of home repair insurance plans: an appliances plan, a systems plan, and a combination plan. An appliances plan covers basic home appliances, such as refrigerators, ovens, and washing machines. A systems plan covers major systems in the home, such as the electrical and heating systems. A combination plan offers protection for both systems and appliances, making it a comprehensive option for homeowners.

In addition to these standard plans, home warranty companies typically offer optional add-on coverage for items like swimming pools, septic systems, and roof leaks, for an extra monthly fee.

It is important to note that home repair insurance does not cover accidental or purposeful damage, damage caused by natural disasters, insufficient maintenance, or unusual wear and tear.

The cost of home repair insurance varies depending on the level of coverage and the company providing it. Basic coverage can start at around $300 per year, while higher-priced policies can cost up to $600 per year, offering coverage for a wider range of items.

When choosing a home repair insurance policy, it is important to consider the location and size of the home, the service fee, coverage caps, and exclusions to ensure that you have comprehensive protection for your home.

What is a home warranty insurance policy?

A home warranty insurance policy is a residential service contract that covers the cost of repairing or replacing major home appliances and systems. It is different from homeowners' insurance, which covers the loss of the home and its contents due to fire or certain other natural disasters. A home warranty covers wear and tear on appliances and systems, and can be purchased for older homes where information on the age and maintenance of appliances is not readily available.

Home warranty coverage can cost between $432 to $816 a year, and there's a $36 to $68 fee for each item serviced. The cost varies depending on the property type—single-family detached, condo, townhouse, or duplex—and whether the homeowner purchases a basic or an extended plan. In addition to an annual premium, home warranties charge a service call fee (or trade call fee) of around $55 to $150 every time a service provider visits the house.

Home warranty plans typically cover major appliances such as water heaters, stoves, and refrigerators. They may also include systems such as HVAC, plumbing, and electrical. It is important to read the fine print of a warranty document to understand coverages and exclusions. While some warranties cover garage door openers as part of the basic coverage plan, others may require additional premiums.

Home warranties are often offered when purchasing a home. The seller may offer to purchase one to provide peace of mind that any component of the home can be fixed affordably. Home warranty providers usually have agreements with approved service providers, who will assess the damage and provide a report to the warranty company. If the provider determines that the needed repair or replacement is covered by the warranty, they will complete the work. The homeowner only pays a small service fee, plus the cost of the warranty.

What are home protection plans and home repair programs?

Home protection plans and home repair programs are the same as home warranties or home repair insurance. They are optional policies that protect homeowners against wear and tear to major home systems and appliances.

Home repair insurance provides peace of mind when important items malfunction by covering the cost of expensive repairs and replacements. Unlike homeowners insurance, home repair insurance covers major systems and appliances that break down from everyday wear and tear.

Home repair insurance is an annual service contract that covers repair costs for major systems and appliances in the home when they break down due to normal wear and tear. It is an additional form of protection for important home items if they unexpectedly stop working, and you don’t have an emergency budget to cover costs.

There are three common types of home repair insurance plans: an appliances plan, a systems plan, and a combination plan. An appliances plan usually covers basic home appliances, such as your refrigerator, range, cooktop, oven, garage door openers, and your clothes washer and dryer. A systems plan will cover most major systems in your home, from your electrical system to your heating system. A combo plan protects systems and appliances, making it a good choice for homeowners who want comprehensive coverage of all major home items.

The cost of home repair insurance varies depending on the level of coverage. Basic coverage will usually only provide repairs and replacement for appliances and can be expected to cost around $300 per year. Higher-priced policies can cost as much as $600 per year and provide coverage for more items such as swimming pools and hot tubs.

The average cost of a home repair insurance policy is between $45 and $72 per month or $540 and $865 per year. On top of this amount, customers pay a service fee whenever a contractor comes to fix a broken system or appliance. Service fees typically range between $75 and $125.

Home protection plans and home repair programs are, therefore, a form of insurance that covers the repair or replacement of important appliances and systems in the home.

What is utility insurance?

Home repair insurance, also known as a home warranty or home maintenance insurance, is an optional annual service contract that covers repair costs for major systems and appliances in the home when they break down due to normal wear and tear. It is a stand-alone policy that bridges the coverage gaps in standard homeowners insurance policies, which typically exclude coverage for specific items if damage results from everyday use.

Home repair insurance provides peace of mind by covering the cost of expensive repairs and replacements. When you take out this insurance, your home warranty company will provide a trained technician to diagnose the problem and, if it's covered, pay most of the repair costs.

There are three common types of home repair insurance plans: an appliances plan, a systems plan, and a combination plan. An appliances plan usually covers basic home appliances, such as your refrigerator, range, cooktop, oven, garage door openers, and washer and dryer. A systems plan will cover most major systems in your home, including your electrical system and heating system. A combo plan protects both systems and appliances, making it a good choice for comprehensive coverage.

Home repair insurance policies set specific dollar limits for certain items. For example, a policy may place a $1,500 limit on washing machines, meaning that coverage for a repair or replacement can't exceed that amount, even if your machine is worth more. Most companies have different policy limits for different items, so it's important to read the fine print before purchasing a policy.

Now, what is utility insurance? Utility insurance, also known as service line coverage or buried utility lines coverage, is an endorsement that can be added to many home insurance policies. It covers the cost of repairing or replacing broken utility lines running into your home, including water pipes, power lines, cables, and even the main sewer line. The coverage limit is typically up to $10,000 and may include a deductible, which will increase your premium.

Service line coverage is important because repairing or replacing a utility line can be financially crippling, and standard homeowners insurance usually won't cover these costs. Damage covered by utility insurance includes that caused by a mechanical breakdown, artificially generated electric current, or the weight of people, animals, or equipment.

In summary, home repair insurance and utility insurance are both important forms of protection for homeowners. Home repair insurance covers the cost of repairing or replacing major systems and appliances in the home when they break down due to normal wear and tear. Utility insurance, on the other hand, covers the cost of repairing or replacing broken utility lines running into your home, such as water pipes or power lines. Both types of insurance provide valuable financial protection and peace of mind for homeowners.

What is contractors insurance?

Contractors insurance is a package of insurance policies that protect construction businesses from financial losses in the event of lawsuits and other claims. It is usually a combination of several different types of business insurance, with the most common being general liability insurance and inland marine insurance.

Contractors insurance is important in situations such as damage to a customer's home or belongings, theft of materials, or a customer accusing you of faulty work and filing a lawsuit. It can also cover injuries to employees and damage to vehicles and business property.

The types of insurance included in a contractor's insurance package will depend on factors such as the size of the company, the state in which it operates, and the type of work carried out.

A contractor's insurance package can include:

• General liability insurance: Covers third-party bodily injury, property damage, and more.
• Inland marine insurance: Covers business property while in transit or stored by a third party.
• Builder's risk insurance: Covers damage or loss to buildings under construction or renovation due to fire, weather events, vandalism, or other hazards.
• Workers' compensation insurance: Covers employees' injuries or illnesses sustained while at work.
• Commercial auto insurance: Covers vehicles used for business purposes and protects against expenses related to accidents, such as property damage and injuries.
• Commercial property insurance: Covers business property damaged by accidents, weather events, or other hazards.
• Professional liability insurance: Covers claims against the business for mistakes, oversights, breach of contract, professional negligence, or failure to deliver a service on time.

The cost of contractors insurance can vary depending on the types of coverage, the number of employees, the business location, and the company's claims history. According to Insureon, a business insurance marketplace, the median costs for contractor insurance can be as high as $595 per month when purchasing multiple individual policies. However, you may not need all of the coverages offered.

• General liability insurance: Less than $70 per month.
• Workers' compensation insurance: $275 per month.
• Commercial auto insurance: $150 per month.
• Contractors' tools and equipment insurance: Less than $15 per month.
• Professional liability insurance: $85 per month.

Frequently asked questions