Everything you need to know about insurance basics, like coverage types, limits, cost and more.
What Is Equipment Breakdown Insurance Coverage?
Homes are becoming outfitted with new and advanced equipment, which is great for convenience, ease and keeping homes safer. But this cutting-edge technology comes at a cost when replacing certain equipment in your home gets pricey. That's why it's important to know about your option to add equipment breakdown coverage.
Equipment breakdown coverage is added coverage that offers protection should your appliances, home systems or smart home devices be damaged due to mechanical, electrical or pressure systems breakdown. Let's take a closer look at this coverage.
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[MUSIC PLAYING]
On screen: A logo representing broken equipment is shown with the title “Equipment breakdown coverage.”
Narrator: Equipment breakdown coverage protects your budget from unexpected costs due to home appliance failure or breakdowns. And with 18% to 24% of new appliances failing within the first year, you'll want to consider this coverage to protect your investments.
On screen: Animation of a laundry machine shaking with the point “18%-24% of new appliances fail within the first year” focused on specifically.
Narrator: So, what's covered?
On screen: The words, “protect the everyday appliances in your home” are written above minimalistic icons of common household equipment.
Narrator: It protects the everyday appliances in your home you've come to rely on, like your refrigerator, air conditioner, furnace, and electrical appliances. And the cost of this equipment in your home adds up quickly.
That's why equipment breakdown coverage is an affordable, easy way to make sure you're financially protected for unplanned, costly repairs or replacement.
And when you have this coverage, you'll have a single point of contact to help remedy the situation. No sorting through complicated documents or trying to find a repair specialist. You'll just submit a claim, and we'll get you the help you need.
On screen: The words, “home uninhabitable due to delayed repairs?” are written above minimalistic icons of a hotel building and a plate with silverware on it. The words, “additional living expenses may be covered” are written below.
Narrator: If your home becomes uninhabitable due to delayed repairs, you might be covered for additional living expenses, like hotel and food costs, while the equipment is being repaired.
Connect with an American Family agent to learn if this coverage is right for you and get a quote today.
On screen: The American Family Insurance logo is shown above the call to action, “talk to your American Family agent.”
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What Does Equipment Breakdown Insurance Cover?
Did you know that according to consumer reports, around 25 percent of new appliances fail within their first five years? And as homes increase in size with more complicated and expensive equipment, the need for this breakdown coverage will increase. Having this coverage can protect you from paying the expensive repair or replacement costs that accompany a breakdown of important pieces of equipment in your home, including:
- Refrigerators, ovens and stoves
- Washers and dryers
- Heating and cooling units, including furnaces and water heaters
- Home security systems
- Electrical systems
- Computers
- Well pumps
- Swimming pool equipment
- Garden tractors
How It Works: See Equipment Breakdown Coverage in Action
See how equipment breakdown coverage protects your home with our interactive home experience. See what common breakdown repairs cost and decide if this optional coverage is right for you and your home.
What Does Equipment Breakdown Coverage Cost?
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.
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Equipment
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Component Affected
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Condition
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Result
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|---|---|---|---|
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Swimming Pool Pump
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Pump Seal
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Leaking seal
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Excessive use of water
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|
Air Conditioning Unit
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Condenser Coil
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Pinhole leaks in coil
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Loss of refrigerant
|
|
Electrical Panel
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Circuit Breaker
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Worn contacts
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Loss of electricity to electrical outlets
|
|
Dishwasher
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Pump
|
Worn pump seal
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Leaking water
|
|
Emergency Generator
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Radiator
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Leaking radiator
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Engine overheat and shutdown
|
|
Water Heater
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Storage Tank
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Excessive corrosion/rust
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Leaking water
|
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Washer
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Holding Tank
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Dried out seal
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Leaking water
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Cast-iron Boiler
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Burner Assembly
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Worn electrode in burner
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Lack of comfort heat
|
|
Dryer
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Drum
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Worn belt
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Drum will not rotate
|
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Oven
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Temperature Sensor
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Faulty sensor
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Oven will not heat to temperature
|
|
Television
|
Tube
|
Green images
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Worn picture tube
|
|
Garbage Disposal
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Grinding Teeth
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Worn teeth
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Clogged drain
|
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.
Real-World Scenarios in Which Equipment Breakdown Coverage Can Help
If you’re asking yourself, “when would I need equipment breakdown coverage?“ there are many cases when this insurance can really pay off. For instance, suppose a new stackable washer and dryer set experienced damage due to a power surge. As a result, neither unit is working at all.Or, suppose a high-voltage power surge was sent through the neutral line of your electrical system — and now your smart home hub is damaged beyond repair. In both cases, with this important additional insurance, you’d be covered. After paying your deductible, your expenses would be covered up to the equipment breakdown endorsement's limit.
Is the Cost to Repair or Replace Home Equipment Expensive?
From kitchen appliances to heating and cooling systems, the cost of equipment in your home adds up quickly — simply replacing an HVAC system can cost up to $4,500. Imagine if a power surge were to damage multiple pieces of equipment in your home. Would you be prepared to pay the repair or replacement costs? Most homeowners don’t protect against this kind of unexpected event. But equipment breakdown coverage is an easy way to make sure you’re financially protected.
What’s the Difference Between Equipment Breakdown Coverage and a Home Warranty?
If you’re weighing your options against other policies, there’s a big difference between equipment breakdown coverage vs. a home warranty. First off, the premium for a home warranty is much more expensive, sometimes ranging above $500 annually. Contrast that with an additional expense starting at $30 to your existing homeowners premium, and the difference is obvious. Secondly, you’ll still probably have to pay for a service visit and then a deductible before your coverage is active with a home warranty. And those extra costs can start to add up quickly. Equipment breakdown coverage helps keep more money in your pocket and offers great protection too.
Learn More About Equipment Breakdown Coverage
Want to learn more about equipment breakdown coverage? Connect with your American Family Insurance agent to find out how you can add this protection to your current homeowners insurance policy, and gain peace of mind that you’re protecting all the things you work so hard for.
Additional Coverages to Further Protect Your Home:
No matter where you live, your home can experience sump pump failure or water backup. But if you have the right coverage, you can mitigate these issues. Learn more from American Family Insurance.
Service lines provide necessary resources to your home, but many homeowners don’t realize that they’re responsible for the maintenance and repair of their water, sewer and power lines. Learn about service line coverage and how to protect your home today.
Protect Your Appliances and Home Equipment
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Some coverages may not be available in your state. Please speak with your agent to learn more about your coverage options.
Coverage applies once a deductible has been met. All statements regarding insurance coverage are general descriptions. These statements do not add or modify any coverage under your insurance policy. If there is any difference in the description of the coverage/endorsement, the policy provisions will apply. Please review your policy or call your agent for information regarding coverage that may be available to you.
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