Does Homeowner Insurance Cover Appliances?
Decipher homeowner insurance coverage for your appliances. Understand when they're protected, common exclusions, and other valuable options.
Homeowner’s insurance policies protect your dwelling and personal belongings. While policies cover many types of damage, appliance protection is specific. Coverage depends on the cause of damage, as not all malfunctions are covered. Understanding these differences helps homeowners manage repair or replacement costs.
Covered Appliance Damage
Standard homeowner’s insurance covers appliances damaged by specific, sudden, and accidental events, known as “covered perils.” These include fire, lightning, theft, and vandalism. For instance, if a kitchen fire damages your oven, the policy would likely cover repair or replacement costs, up to your limits and after your deductible. If your refrigerator is stolen during a break-in, personal property coverage would help with replacement.
Certain types of water damage can also trigger appliance coverage, provided the damage is sudden and accidental. This includes water damage from a burst pipe, an overflowing appliance, or sudden discharge from a household system. For instance, if a washing machine hose suddenly breaks and floods your laundry room, damaging the appliance, this event would be covered. However, gradual leaks, such as a slow drip over time, are excluded.
The classification of an appliance within your policy determines which coverage applies. Built-in appliances, like a water heater, furnace, or central air conditioning unit, are considered part of the home’s structure and are covered under dwelling coverage. Conversely, portable or plug-in appliances, such as refrigerators, standalone ovens, and dishwashers, are categorized as personal property. If these items are located in a detached structure on your property, like a shed or detached garage, they might fall under “other structures” coverage.
Uncovered Appliance Damage
Homeowner’s insurance policies have specific exclusions for appliance damage. Normal wear and tear, the gradual deterioration of an appliance over time, is not covered. If an appliance stops working due to age or mechanical malfunction, the policy will not cover its repair or replacement.
Mechanical or electrical breakdowns are excluded unless directly caused by a covered peril. For instance, if your washing machine’s motor fails due to internal issues, it is considered a mechanical breakdown and is not covered. However, if a lightning strike causes a power surge that damages your electronics or appliances, this sudden external event would likely be covered under personal property. Policies differentiate between surges caused by external events and those from internal electrical system issues or gradual wear.
Damage from neglect, lack of proper maintenance, mold, or rust is excluded. Homeowners are expected to undertake reasonable upkeep, such as addressing known leaks or performing routine appliance servicing. Standard policies exclude damage from natural disasters like floods or earthquakes, which necessitate separate, specialized insurance policies.
Claim Payout Considerations
When an appliance claim is covered, several factors influence the payout amount. A deductible, which is the amount you pay out-of-pocket before your insurance coverage begins, will apply to the claim. The higher your deductible, the lower your premium, but it also means a larger initial expense for you.
Policies differ in how they value damaged property, using either Actual Cash Value (ACV) or Replacement Cost Value (RCV). ACV coverage pays the depreciated value of the appliance, considering its age and wear. This means you receive less than the cost of a new item, potentially leaving a significant gap. RCV coverage pays the cost to replace the damaged appliance with a new one of similar kind and quality, without deduction for depreciation.
Your personal property coverage has overall limits, representing the maximum amount your insurer will pay for all covered belongings. It is common for personal property coverage to be set at a percentage of your dwelling coverage, ranging from 50% to 70%. It is important to ensure these limits are adequate to cover the value of your appliances and other possessions.
Other Appliance Protection Options
Beyond standard homeowner’s insurance, several options exist for protecting appliances. Home warranties, also known as home service contracts, cover the repair or replacement of major home systems and appliances that fail due to normal wear and tear or mechanical breakdown. Unlike homeowner’s insurance, which covers sudden and accidental damage from specific perils, home warranties address issues arising from everyday use and aging.
These service contracts require an annual fee and a service call fee, similar to a deductible, each time a claim is filed. They cover items like refrigerators, washing machines, dryers, ovens, and HVAC systems.
Extended warranties are purchased from manufacturers or retailers at the time of sale. These provide coverage beyond the manufacturer’s original warranty for mechanical or electrical failures. Some homeowner’s insurance providers offer an “equipment breakdown coverage” endorsement, which can be added to your policy. This add-on covers mechanical or electrical failures that a standard policy excludes, bridging a gap in coverage for appliances.