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Equipment Breakdown Coverage

What Is Equipment Breakdown Coverage?

You do what you can to protect your home from the unexpected — that’s one reason you have home insurance — but to truly protect your home, it’s important you understand all the ways you can keep it safe. 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.

What Does Equipment Breakdown Coverage Cover?

Did you know that 18-24% of new appliances fail within the first year? And as homes increase in size with more complicated and expensive equipment, the need for this 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

This coverage also protects you off-premises, for things like your laptop. And if your home becomes uninhabitable due to an equipment breakdown, you’ll be covered for additional living expenses, like hotel and food costs, while your home is being repaired.

Also, another benefit of having equipment breakdown coverage is the policy pays an additional 50% of the cost to replace a covered piece of equipment with an Energy Star or similar “green” rated model.

How Important Is This Coverage?

You rely on equipment like appliances, heating and cooling units, and electrical systems to keep your home running smoothly. And if something 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. Nothing can be repaired 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. A 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. Since this is a case of wear and tear and occurred over a long period of time rather than suddenly, and it’s still working, just not as effectively, equipment breakdown coverage or your standard home insurance won’t cover the cost to repair or replace the damage.

Equipment
Component Affected
Condition
Result
Swimming Pool Pump
Pump Seal
Leaking seal
Excessive use of water
Air Conditioning Unit
Condenser Coil
Pinhole leaks in coil
Loss of refrigerant
Electrical Panel
Circuit Breaker
Worn contacts
Loss of electricity to electrical outlets
Dishwasher
Pump
Worn pump seal
Leaking water
Emergency Generator
Radiator
Leaking radiator
Engine overheat and shutdown
Water Heater
Storage Tank
Excessive corrosion/rust

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Washer
Holding Tank
Dried out seal
Leaking water
Cast-iron Boiler
Burner Assembly
Worn electrode in burner
Lack of comfort heat
Dryer
Drum
Worn belt
Drum will not rotate
Oven
Temperature Sensor
Faulty sensor
Oven will not heat to temperature
Television
Tube
Green images
Worn picture tube
Garbage Disposal
Grinding Teeth
Worn teeth
Clogged drain

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 air conditioning 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 Does Equipment Breakdown Coverage Cost?

At American Family Insurance, equipment breakdown coverage costs $30 per year for homeowners and manufactured homeowners and $20 per year for condo unit-owners and renters. That’s a small price to pay for a lot of peace of mind!

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.