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.