What Is Homeowners Appliance Insurance?

Commonly referred to as home warranty, homeowners appliance insurance is a valuable service contract designed to cover the repair or replacement costs of appliances and home systems when they malfunction due to normal wear and tear or breakdowns from regular usage.

Homeowners appliance insurance plans come in various forms to suit your specific needs, which can be categorized into three main types:

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

Some also policies 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.

A homeowner's appliance insurance policy does not eliminate the cost of repairing items. Instead, it significantly reduces the costs, with a fee charged for each repair visit. In most cases, this fee is much less than the total cost of the repair, and the insurance policy covers the remainder within its limits. But you pay a predetermined service fee when 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 is intended for normal wear and tear, not damage from external events like fires, floods or electrical 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 is best suited for homeowners who want to protect their household appliances from unexpected breakdowns and repair costs. While lenders do not typically require it as part of a mortgage agreement, having this coverage can be beneficial for: 

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

In summary, while homeowners appliance insurance is not mandatory, it can be a valuable option for various homeowners, especially those who want to safeguard their appliances and budget for potential repair costs. Assess your specific situation and the condition of your appliances to determine if this coverage is a good fit for you.

Unlike homeowners insurance, homeowner's appliance insurance does not eliminate the cost of repairing or replacing items. You will have to pay certain fees. Below are the different fees typically involved in 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, a service fee or deductible is typically required.
• 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. Companies typically require a written notice of termination, and some may offer a prorated premium refund, potentially with a cancellation fee deducted.

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

Homeowners appliance insurance can provide valuable coverage for your household appliances, but it's important to understand its limitations and when providers may deny insurance claims. 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 maximize your homeowners appliance insurance. To mitigate these limitations, maintain your appliances properly, read your policy carefully and communicate with your insurance provider if you have any questions or concerns about coverage.

Also consider discussing with your provider any optional coverage or endorsements that may address specific limitations or concerns you may have.

Homeowners appliance insurance, or home warranty, provides coverage for the repair or replacement of essential appliances and systems in the home. It can include anything from your plumbing system to your household electronics. In this guide, we explored what this type of policy is, the different kinds, what it covers and how it works to help determine whether this coverage is right for you. 

Although this insurance alleviates some financial burden, it typically does not eliminate all costs associated with repairs or replacements. There are often service fees or deductibles that homeowners are still responsible for.

We 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.