Appliance insurance is basically an extended warranty on your appliance. This warranty can cover repairs or replacement if your appliance breaks down, much like a manufacturer's warranty. There are two primary ways to get appliance insurance: buying an extended warranty when you buy your appliance new or purchasing a home warranty plan. A home warranty can cover appliances and other systems in your home, such as your HVAC and plumbing systems, or it may be an appliance-only policy. You can choose the level of coverage you want depending on the appliances and systems you want to cover. A home warranty with appliance insurance is almost always cheaper than buying an extended warranty on a new appliance and it can even cover old appliances that came with your home.
How Appliance Insurance Works
An appliance warranty plan is usually very simple. You sign a contract with the warranty coverage with the level of coverage you have chosen. You pay an upfront fee in exchange for coverage if your appliances break down and need repairs or replacement. The warranty company typically has contracts with thousands of vendors who offer appliance repairs. If you make a claim with your warranty company, you will pay a service call fee and the provider will call one of their partners to send a licensed technician to evaluate your appliance. The technician will decide if your appliance can be repaired or if it needs to be replaced. Both options will be covered by your plan.
Appliances Covered by Appliance Insurance
When you buy an appliance insurance plan, most appliances in your home can be covered. This includes:
- Oven, range, and/or cooktop
- Built-in microwave
- Washer and dryer
- Garage door opener
- Built-in food processor
When choosing an appliance insurance policy, make sure you note which appliances are and are not included. Some appliances are actually considered home systems. This can include the garbage disposal and water heater, for example. Other appliances may require upgrading your policy, such as water softeners and ice makers. Some policies exclude some appliances, such as washers and dryers, while others include them in a standard policy. There are a few appliances that are rarely covered, such as solar panels.
Questions and Answers:
Appliance insurance can be a cost-effective way to give you peace of mind and pay for eventual breakdowns you will face as a homeowner, including leaking dishwashers and refrigerators that aren't getting cold. Here are answers to some common questions you may have about appliance warranty plans.
Q: What happens if my appliance breaks?
A: With most appliance insurance companies, a local technician within their network will be dispatched to your home to perform repairs. If your appliance cannot be repaired, your policy will pay to replace it.
Q: Do I need to pay a fee or deductible to use my policy?
A: Yes. Appliance insurance is usually a part of a home warranty. You will pay the upfront premium for the policy and a small service call fee if you need to request service on an appliance. This fee may be anywhere from $30 to $100, although it's typically much lower than repairs would cost otherwise.
Q: Does an appliance need to be new to be covered?
A: No, most insurers will cover your appliances regardless of their age. To be covered, your appliance must be in good, working condition when you buy the policy, however.
Q: Doesn't my homeowner's insurance cover my appliances?
A: In a way, yes. Homeowner's insurance will consider your appliances as personal property. Your insurance plan will only cover repairs or replacement of your appliances if they are damaged by a covered event like burglary or fire. Appliance insurance covers repairs or replacement for almost any reason, including normal wear and tear. This is similar to car insurance. Your car insurance company will pay for repairs to your car in an accident but it will not pay to replace a fuel pump that has gone bad, for example.
Q: Are all repairs and damage covered?
A: Appliance insurance covers most types of damage and necessary repairs to your appliances, including perils that are not covered by homeowner's insurance. This includes normal wear and tear and accidents. Most appliance insurance plans require that you maintain your appliance properly. This is because the plan will cover normal wear and tear to the appliance. If it isn't maintained, it will break down more often. Unfortunately, you may run into trouble buying an existing home with aging appliances that weren't well maintained if you buy a warranty and need to make a claim. There may be some exclusions, such as weather-related damage and mold damage.
Q: How long does coverage last?
A: You will typically buy a 1-year appliance insurance policy with an upfront cost. You can generally choose to renew the policy every year if you wish.