What Is Homeowners Appliance Insurance?

Homeowners appliance insurance, often called a home warranty, pays for repairs or replacements when covered appliances and home systems break down from normal wear and tear. It fills a gap that standard homeowners insurance doesn't address, covering everyday breakdowns rather than sudden disasters. Coverage terms, limitations and exclusions vary by provider and policy.

Appliance insurance addresses worn-out water heaters and failing refrigerators, while traditional homeowners insurance protects against sudden disasters. For those evaluating property coverage, comparing the best homeowners insurance companies or average home insurance costs by state helps identify reliable protection at a competitive price.

Homeowners appliance insurance plans come in 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 covers appliances and systems in your home, though specific coverage varies by provider and plan.

Your provider and policy determine coverage. Plans don't include all items listed here. Check your policy terms for what's actually covered.

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.

Appliance insurance doesn't eliminate repair costs, but it cuts your out-of-pocket expenses by covering most repairs in exchange for a service fee per visit. The service fee is typically well below the actual repair cost. You pay it each time a covered appliance or system breaks down, and the policy covers the rest.

Homeowners appliance insurance covers repair or replacement costs when specific circumstances are met. A natural disaster that damages an appliance is one example. Key situations where a home warranty applies:

• 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.

Whether appliance insurance makes sense depends on your appliances' age, your repair budget and how much financial risk you're willing to absorb. The comparison below shows where coverage saves money and where it falls short.

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: You'll pay regular premiums for home appliance insurance. Premium costs vary based on your insurer, coverage level, number and age of appliances, and location.
• Service fees: You'll pay a service fee or deductible when you request a repair or replacement for a covered appliance.
• Additional coverage costs: Some providers sell additional coverage for specific appliances or systems not included in their standard plan, increasing your costs. Coverage splits between systems (like plumbing), standalone appliances (like refrigerators) and riskier items like pools or sump pumps.
• Renewal costs: Your renewal costs for home appliance insurance can vary as premium rates change.
• Cancellation fees: Cancellation processes and fees vary by company. You can get a full refund minus a service fee for policies less than 30 days old without any service received. Most companies require written termination notice and 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 cuts repair costs, but it won't cover everything. Know these common reasons companies deny claims:

• Pre-existing issues: Appliances with conditions that predate coverage activation fall outside the policy's scope.
• Maintenance responsibility: Documented gaps in routine maintenance can serve as grounds for claim denial.
• Excluded appliances: Coverage does not extend to every appliance, and included items vary by plan.
• Appliance age: Older appliances may qualify for reduced coverage or none at all.
• Unauthorized repairs: DIY repairs carried out without prior approval from the provider invalidate the claim.
• Negligence: Damage resulting from misuse or improper operation falls outside covered losses.
• Policy exclusions: Each policy maintains its own exclusion list, which should be reviewed before filing a claim.
• Timely reporting: Late reporting of a breakdown can lead to claim denial.
• Installation issues: Breakdowns attributable to improper installation are not covered.

Appliance owners who maintain their appliances, read the policy and ask their provider about specific exclusions before a breakdown are less likely to face a denied claim.

Ask your provider what optional coverage is available to fill gaps 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 built around the average homeowner. Sampling different locations and companies produces a reliable estimate of what homeowners actually pay, and shows how much those figures vary across insurers.

Methodology

MoneyGeek evaluated homeowners insurance carriers using premiums and insights from the official databases of Quadrant Information Services. The analysis was built around a sample homeowner profile reflecting a good credit score (769 to 792), a home constructed in 2000, wood-frame construction and a composite shingle roof.

Unless otherwise specified, quotes were collected using standard coverage limits of $250,000 in dwelling coverage, $125,000 in personal property coverage, $200,000 in personal liability coverage and a $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.