Home appliance insurance, also known as a home warranty, is a service plan that covers systems and appliances in your house if they break down because of age or wear and tear. Covered appliances typically include refrigerators, washers and dryers, dishwashers, water heaters, or larger systems like central air-conditioning.
Since homeowners insurance doesn’t cover breakdown due to everyday wear and tear, home appliance insurance can be worth it if you live in a home with older systems and appliances.
But like any warranty product, home appliance insurance contracts have their downsides as well. Many of the best home warranty companies will boast about all of the appliances that are covered in their plan, however what they’re not telling you about is what is in the fine print. Home appliance insurance contracts are confusing and full of exclusions, or causes of breakdown that aren’t covered. Additionally, you usually don’t have a say in service contractors or replacement appliances, so there’s a chance repairs or new appliances won’t be to your liking.
Is there a difference between home appliance insurance and a home warranty?
No, home appliance insurance is just another name for a home warranty. Certain home warranty companies may brand their products as “home appliance insurance” or a “home appliance warranty plan” or even “home repair insurance”, but these offerings are all functionally the same thing.
What does home appliance insurance cover?
A basic home appliance insurance plan covers basic appliances in your home, such as your microwave, oven, furnace, and heating, ventilation, and air-conditioning (HVAC). Unlike homeowners insurance, home appliance insurance doesn’t protect you against sudden and accidental perils like fire or theft or weather-related damage, but rather it covers the gradual breakdown and deterioration of appliances and systems.
The type of appliances and systems that are covered will vary depending on the level of plan you’re paying for, but you can generally expect the following to be covered:
Appliances | Systems | Other home features |
|---|---|---|
Microwave | Air conditioning | Burglar and fire alarm systems |
Dishwasher | Ductwork | Ceiling and exhaust fans |
Garbage disposal | Electrical system | Central vacuum |
Oven/cooktop | Heating system/furnace | Doorbells |
Trash compactor | Permanent sump pump | Garage door opener |
Refridgerator | Plumbing system | Re-key services |
Washer/dryer | Water heater |
How much does home appliance insurance cost?
Home appliance insurance costs around $25–50 a month, or $300–600 a year, although the price of warranty plans can fluctuate greatly depending on the extent of your coverage.
Aside from your monthly premiums, you’re also typically charged a service fee whenever a repairs person is sent to your home for assessments or repairs. Service fees are usually anywhere from $60–120.
Is home appliance insurance worth buying?
If you live in a house with older systems and appliances, home appliance insurance could be worth it. If your central A/C breaks down a year or two into the contract, and repairs or a new system cost thousands of dollars, it will prove to be a good investment.
You can also find decent value in home appliance insurance if you’re purchasing a house and the buyer's inspection reveals systems or appliances that are close to breaking. It’s not uncommon for homebuyers to include a warranty purchase in the buyer contingency. This means that the sale of the home is contingent upon the seller agreeing to pay home warranty premiums for an agreed-upon amount of time.
But warranties have their drawbacks as well. They cost a lot of money for something that exclusively covers appliance breakdown, and warranty contracts are notoriously full of exclusions and specific instances where you’re not covered.
For example, refrigerator breakdown is covered by most warranties, but certain plans won’t cover specific parts like ice crushers or beverage dispensers. This is the case for just about every system and appliance in warranty contracts, so there’s a lot of apprehension about whether home appliance insurance will deliver when you need it to.
Home appliance insurance vs. equipment breakdown coverage
If you already have homeowners insurance but you’re looking for additional protection for your appliances, consider adding an equipment breakdown coverage endorsement to your policy. Equipment breakdown coverage helps cover the cost of repairing or replacing broken down systems and appliances, but with a cost of around $25 a year, it is considerably cheaper than home appliance insurance.
