Deciding if you need home appliance insurance can be daunting if you don’t know what factors to take into consideration. However, it is something you should consider if you have major appliances that may need replacement. Your financial situation may affect your decision as well.
Maybe you can afford an insurance premium, but don’t have the cash to replace your refrigerator if something goes wrong. Perhaps the opposite is true and you have savings that can cover the cost of a major purchase. Here’s what to factor in as you consider home appliance insurance.
What Is Home Appliance Insurance?
Home appliance insurance is similar to home appliance warranties, but it differs in that it covers replacement, not just repairs. While your appliances are covered under your homeowner’s insurance if damaged or stolen in specific circumstances, appliance insurance helps if something goes seriously wrong with one of your appliances and it doesn’t work properly, if at all.
You pay a premium, and the cost of your policy is based on the estimated value of your appliances and the time period you want to insure them. You can insure only a specific set of appliances, like those in your kitchen, or you can look for a policy that will cover all of your appliances.
Factors to Consider When Deciding if You Need Appliance Insurance
Factor 1: Age of your appliances. If your appliances are old, the cost of the coverage may end up being more expensive than their value.
However, if your appliances are fairly new, it probably makes sense to have home appliance insurance. Most warranties cover new appliances for the first year, but after that you are on your own, unless you buy an extended warranty.
Often, an extended warranty can cost more than home appliance insurance as it must be purchased individually for each appliance.
Factor 2: Finances. Think about the possibility of having to replace one of your appliances.
Purchasing an appliance can be a major expense. If your front-load dryer happens to break down, can you easily replace it? This is something to consider before deciding if you need home appliance insurance.
If you would have to go without a dryer for an extended period of time, or if it would be a financial hardship to purchase a new one, insurance might be a good idea. If you can afford to buy a new dryer without any problems, then chances are you may not need this type of insurance.
Factor 3: What do you want to insure? Consider which appliances need coverage.
Sometimes there is only a specific set of appliances you want to insure. It may be the ones in your gourmet kitchen, or the expensive washer and dryer in your laundry room. Depending on the insurance company, you may have the option to only insure one room’s appliances instead of purchasing a blanket policy. This option can even be cheaper.
When you are shopping for home appliance insurance, you may want to compare home insurance costs at the same time. Some insurance companies will offer you a competitive and discounted rate if you purchase multiple policies with them.
Before deciding if you need home appliance insurance, remember to think about what the insurance covers, as well as factors like the age of your appliances and your finances.