What Is Homeowners Appliance Insurance?

Homeowners appliance insurance, often called a home warranty, pays for repairs or replacements when your appliances and home systems break down from normal wear and tear. Think of it as protection for the everyday breakdowns that standard homeowners insurance doesn't cover. Coverage terms, limitations and exclusions vary by provider and policy.

While appliance insurance handles worn-out water heaters and failing refrigerators, traditional homeowners insurance protects against sudden disasters. If you're shopping for property coverage, comparing the best homeowners insurance companies or average home insurance costs in your state helps you find reliable protection.

Homeowners appliance insurance plans come in three main types to match your specific needs:

A home warranty may not cover all types of repairs or replacements because limitations and exclusions usually vary from provider to provider.

Homeowners appliance insurance covers a range of appliances and systems within a home, although the specific coverage can vary depending on the provider and the plan chosen.

Coverage varies by provider and policy. Not all items listed may be included in every plan. Review your specific policy terms for exact coverage details.

Some policies also cover other home features like burglar and fire alarm systems, ceiling and exhaust fans, central vacuum, doorbells, garage door openers and re-key services. Other items that may be covered include sump pumps, lawn sprinklers and septic systems.

Not all appliances and systems may be covered under a standard policy. Certain items, like HVAC systems and water heaters, might not be included in an appliance-only policy and may require extended coverage options for an additional price. Some providers often bundle appliance coverage with home systems in their plans.

Understanding how appliance insurance works can help you make informed decisions about your home's financial protection. These policies don't eliminate repair costs, but they can cut your out-of-pocket expenses by covering most repair costs in exchange for a service fee per visit.

This service fee is usually much less than the total repair cost, and your policy covers the rest. You'll pay this fee each time a covered appliance or system breaks down.

Homeowners appliance insurance kicks in under specific circumstances to cover the cost of repairing or replacing appliances and systems in your home. For example, your policy may provide coverage if the appliance or system is damaged due to a natural disaster. Here are key situations when a home warranty becomes applicable:

• Mechanical or electrical failures: Breakdowns due to mechanical or electrical failures are usually covered. This includes problems like ruptures or bursts, power surges, short circuits, motor burnouts and pressure system breakdowns.
• Wear and tear: Standard wear and tear is covered by home warranties. For instance, parts that rust may be covered. The extent to which wear and tear is covered varies from provider to provider.
• Accidents and disasters: Home appliance insurance covers normal wear and tear, not damage from fires, floods or power surges.
• After the manufacturer's warranty expires: When the manufacturer's warranty on an appliance or system has expired and your appliances break down, your home warranty kicks in.

Homeowners appliance insurance works best for people who want protection from surprise appliance repairs. Lenders don't require it, but it's helpful for:

• Homeowners with aging appliances
• Homeowners on a tight budget
• First-time homebuyers
• Landlords
• Those who lack DIY repair skills

Home appliance insurance isn't required, but it can be worth it if you want to protect your budget from surprise repair bills. Consider your appliances' ages and your financial situation to decide if it makes sense for you.

Homeowners appliance insurance can be a smart safeguard, but it’s not a one-size-fits-all solution. The right choice often depends on the age of your appliances, your repair budget, and how much risk you’re willing to take on. This side-by-side view highlights where the coverage can truly save you money and where it might fall short so that you can make a decision based on your home’s specific needs.

Unlike homeowners insurance, homeowner's appliance insurance doesn't eliminate the cost of repairing or replacing items. You will have to pay certain fees. Below are the fees you can expect with home warranty.

• Premiums: Home appliance insurance involves paying regular premiums. These premiums can vary based on factors such as the insurer, level of coverage, number and age of appliances, and your location.
• Service fees: When a service call is made to repair or replace a covered appliance, you may need to pay a service fee or deductible.
• Additional coverage costs: Some providers may offer additional coverage for specific appliances or systems not included in their standard plan, which can incur higher costs. Coverage may be split between systems (like plumbing), standalone appliances (like refrigerators) and riskier items to insure, like pools or sump pumps.
• Renewal costs: The cost of renewing a home appliance insurance policy may vary and be subject to changes in premium rates.
• Cancellation fees: The cancellation process and fees may vary by company. For policies less than 30 days old without any service received, you might be able to get a full refund minus a service fee. Most companies require a written notice of termination and may provide a prorated premium refund, minus any cancellation fee.

Thoroughly review your home warranty policy to understand the coverage limits, exclusions and terms because these may vary between providers and plans.

Home appliance insurance helps with repair costs, but you need to understand what it doesn't cover and when companies might deny your claim. Common limitations include:

• Pre-existing issues: Insurance may not cover appliances with existing problems.
• Maintenance responsibility: Neglecting maintenance can lead to denied claims.
• Excluded appliances: Some appliances may not be covered, or coverage may vary.
• Appliance age: Older appliances may have limited or no coverage.
• Unauthorized repairs: DIY repairs without approval can result in claim denials.
• Negligence: Damage due to misuse or negligence may not be covered.
• Policy exclusions: Review policies as they may have specific exclusions.
• Timely reporting: Failing to report issues promptly could also lead to claim denials.
• Installation issues: If a breakdown occurs due to improper installation, it may not be covered under the warranty.

Understanding these limitations helps you get the most from your home warranty. Keep your appliances maintained, read your policy carefully and ask your provider about coverage questions.

Talk to your provider about optional coverage that might address specific gaps or concerns in your standard plan.

Home appliance insurance (or home warranty) helps pay for repairs and replacements of your appliances and home systems: everything from plumbing to refrigerators. We've covered what it is, the different types, what's covered and how it works to help you decide if it's right for you.

This coverage reduces your repair costs but doesn't eliminate them completely. You'll still pay service fees or deductibles for each repair visit.

We answer common questions on home appliance insurance to shed light on what it’s about and how it can cover your belongings.

Why Trust MoneyGeek? 

MoneyGeek analyzed quotes from multiple insurance providers across the U.S. using a profile that reflects the average homeowner. By considering different locations and companies, we aim to give a reliable estimate of what homeowners can expect to pay — showing why it’s important to compare rates. 

Methodology

MoneyGeek evaluated homeowners insurance carriers incorporating insights and premiums from the official databases of Quadrant Information Services. 

Homeowner Profile

For our analysis, we created a sample homeowner profile with the following characteristics:

• Good credit score (769 to 792)
• Home constructed in 2000
• Wood-frame construction
• Composite shingle roof

Homeowners Insurance Coverage Details

Unless otherwise specified, we used the following coverage limits to collect quotes for our comparison:

• $250,000 in dwelling coverage
• $125,000 in personal property coverage
• $200,000 in personal liability coverage
• $1,000 deductible

We also compiled data for policies with broader coverage to determine the best companies for insuring expensive homes, upping limits to $1 million in dwelling coverage, $500,000 in personal property coverage and $1 million in liability coverage.