How Important Is Equipment Breakdown Coverage?
You rely on equipment like appliances, heating and cooling units, and electrical systems to keep your home running smoothly. And if equipment breaks down, your standard home insurance policy won’t cover the cost to replace it — leaving you to pay out of pocket. But having this coverage will financially protect you from those unexpected expenses.
Let’s say electrical arcing damaged your electrical service panel. Your boiler control, television, stove and microwave are all severely damaged. The damage is beyond repair, and all the affected items need to be replaced. Your total for the equipment damage comes to $ 8,500. None of this is covered by your standard home insurance policy, and you’d have to pay that cost out of pocket. However, adding equipment breakdown coverage would help cover the costs to repair or replace the damages up to your policy limit after you pay the $500 deductible.
What Is Not Covered by Equipment Breakdown Insurance?
Equipment breakdown insurance can come to the rescue in many instances, but it won’t help you if your equipment has simply worn out from normal wear and tear. That’s why it’s so important to maintain your equipment by performing regular upkeep.
What’s wear and tear? Wear and tear is damage from ordinary use that typically occurs over time, with the performance slowly declining. Mechanical breakdown, on the other hand, occurs suddenly.
An example of wear and tear would be an air conditioning unit that’s still working but isn’t cooling the home as effectively as it once did. Here’s a case of wear and tear which occurred over a long period of time rather than suddenly. And since the mechanicals of the AC are still working — just not as effectively — equipment breakdown insurance won’t cover the cost to repair or replace the damage. Nor will your standard home insurance policy.