What is equipment breakdown coverage on a homeowners policy?
Equipment breakdown coverage is an optional endorsement that may be added to certain homeowners insurance policies to protect against the cost of repairing or replacing appliances and systems if they break down due to certain uncontrollable circumstances. A standard homeowners insurance policy typically won't cover appliances if they break down, but equipment breakdown coverage can provide additional protection at an affordable price for sophisticated household equipment. This coverage doesn't cover wear and tear and is not available on all policies.
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What's covered with equipment breakdown coverage?
Optional equipment breakdown coverage may repair electrical or mechanical breakdowns of your home equipment, but only when the loss is due to certain uncontrollable circumstances such as electrical damage due to artificially generated electrical surges and motor burnouts or ruptures caused by centrifugal force. Normal wear and tear, and damage from neglect and poor maintenance, aren't covered by equipment breakdown coverage.
Equipment protected by this type of coverage varies by insurer and may include:
- Air conditioning and heating equipment
- Computer equipment
- Electric doors and locks
- Emergency generators
- Home gym equipment
- Hot tub and sauna equipment
- Kitchen appliances
- Security systems
- Solar panels
- Sump pumps
- Washers and dryers
- Water heaters and boilers
Example:A high voltage surge damages your refrigerator's compressor. The damage to repair the part is costly, so purchasing a new refrigerator is the best option. Equipment breakdown coverage may pay to replace your covered refrigerator, up to the limits of your coverage, minus your deductible. Equipment breakdown coverage may also cover food spoilage resulting from the covered loss.
How does equipment breakdown coverage compare to a home warranty?
While home warranties can cover the cost of repairing major kitchen appliances, HVAC systems, water heaters, sump pumps, vacuum systems, and washers and dryers, they may not cover the same items as an equipment breakdown coverage endorsement. Both a warranty and a coverage endorsement are generally limited to specific equipment. Assuming your appliance didn't come with a warranty, purchasing a home warranty is generally more expensive than adding an equipment breakdown coverage endorsement. Learn more about how home warranties work.
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