The process of purchasing a new home can sometimes feel like an endless to-do list, but it is essential to put the proper insurance protections in place to ensure that both your path to homeownership and your future as a homeowner run as smoothly as possible.
While the vast majority of homeowners purchase home insurance, it’s important to consider home appliance insurance as well to protect the crucial systems, appliances, and amenities within your home. Here’s what you should know about home appliance insurance, how and when to purchase an insurance plan, and the estimated cost of protection.
What is home appliance insurance?
Home appliance insurance, also commonly referred to as home warranty, covers the cost of damages that occur to household systems, appliances, and/or additional amenities in your home. While homeowner’s insurance protects your home and personal belongings against fires, floods, and other unavoidable accidents that may occur during your residency, home appliance insurance protects you from the cost of unavoidable damage in your home by covering the everyday wear and tear of appliances and other household essentials.
What does home appliance insurance cover?
Though home insurance plans differ based on location, type of home, and overall scope of coverage, they typically cover the cost of damage and repair of household systems and appliances such as:
- Boiler/Water heater
- Heating, ventilation, and air conditioning (HVAC)
- Garbage disposal
Increasing your insurance coverage to include everyday damages that occur to additional household amenities, such as a pool or centralized heating system, may affect the cost of your home warranty. But if you consider these household features to be essential to you and your family, it may be worth insuring them in case of an unexpected issue or emergency.
What doesn’t home appliance insurance cover?
Though insurance coverage varies by plan and provider, home warranty does not cover any appliances with preexisting damages, but only damages due to everyday wear and tear of items, typically occurred through prolonged and frequent use of the product.
Additionally, it’s rare for a home insurance appliance insurance plan to cover the cost of any upgrades, and many do not cover the cost of outright appliance replacement. It is important to consider what the plan you’re interested in covers, and don’t be afraid to read the fine print because sometimes parts of an appliance are covered but not the entire thing.
Should I get home appliance insurance?
According to Choice Home Warranty, the average homeowner should anticipate spending 1% of their home’s value on repairs/replacements each year, as well as an additional $1 per square foot—which certainly adds up. Because of this, it’s encouraged that new homeowners look into this purchasing at least some form of home warranty, as the process of repairing and replacing household appliances is oftentimes expensive and time-consuming.
Additionally, if you intend to own your home for multiple years or even decades, the everyday wear and tear of household appliances is unavoidable, and taking the opportunity to preemptively cover the cost of damage and repairs can save you from incurring out-of-pocket expenses when they inevitably break down.
According to the International Association of Certified Home Inspectors, all household appliances have an average life expectancy. Though many external factors may cause your personal experience to differ from these averages, you may use the following figures as a guideline:
The Average Life Expectancies of Common Appliances
- Air Conditioner: 5-7 years
- Washer/Dryer: 5-15 years
- Dishwasher: 9 years
- Refrigerator: 9-13 years
- Freezer: 10-20 years
- Oven/Stove: 10-14 years
- Garbage Disposal: 12 years
- HVAC System: 20 years
Broken or damaged appliances depreciate the value of your home and will certainly complicate your everyday routines and rituals. Therefore, it’s a good idea for both sellers and buyers to consider purchasing a home warranty to ensure their appliances are covered in times of need, acting as both a convenience and financial safeguard.
How do I pick the best insurance plan?
There are a variety of factors to consider before picking the ideal home appliance insurance plan to satisfy your household needs. Here is a quick checklist to get you started:
Assess your current situation: Before you consider selecting an insurance plan, you must first have a thorough and comprehensive understanding of the appliances that exist within your current household. How many essential appliances do you have? How old/durable are they? Do they have any pre-existing damages? Are they covered under any current warranty (such as manufacturer’s warranty)?
Consider the cost: According to HomeAdvisor, the average cost of home warranty typically ranges from $223 to $1,707. Consider whether you will be able to afford an additional monthly insurance payment within this monetary range, and/or if you will be able to pay for quick and efficient repairs in the case of an emergency. It can seem like a gamble: Should you pay now or risk paying more later? That decision is completely up to you, but be sure to look up cost estimates and think about your options before committing either way.
Think of the future: If you intend to live in your home for years to come, purchasing home appliance insurance can be a worthy investment for your future. It can help you maintain your household in great shape, avoid unexpected repair and replacement costs, and provide you with peace of mind when any issues arise.
Before signing off on your selected insurance policy, be sure to choose a reliable plan that covers everything you need it to. The Better Business Bureau suggests that you read your contract carefully to understand what’s covered and for how long, whether you or your insurance provider is responsible for finding a suitable company to make the repairs, and how to correctly file a claim for the quickest and most efficient repair process.