Best Home Appliance Insurance

By Kealia Reynolds | Advertiser Disclosure

Home appliance insurance—also called a home warranty—is an annual service contract that covers expensive repair and replacement costs and protects major home appliances and systems when they break down due to normal wear and tear. It’s different from traditional homeowners insurance in that it covers major home items instead of covering damage done to the structure of your home.

Having home appliance insurance can be a life-saver if you don’t have an emergency budget for unexpected home repairs and can provide peace of mind that if something were to break down, you’d be covered and receive professional service in a timely manner. Keep reading to learn about home appliance insurance and how to find the best home warranty for you and your home.

Best home appliance insurance providers of 2020

Before buying a home appliance warranty, you should compare different home warranty companies and make sure that you’re comfortable with the one you select. To save you time, House Method did the research for you. We called home warranty companies, asked them the tough questions, and negotiated prices to find out how low they would go. Here’s what we found:

Name

Choice Home Warranty

Description

Best home warranty for: Editor's choice
Plans: 2 plans + optional add-ons
Premiums: $36–$44 per month
Service fee: $85
Availability: All states except CA, OK, and WA
BBB rating: B

Score
8 / 10
Name

American Home Shield

Description

Best home warranty for: Customizable plans
Plans: 4 plans + optional add-ons
Premiums: $50–$60 per month
Service fee: $75–$125
Availability: All states except Alaska
BBB rating: B

Score
9 / 10
Name

First American

Description

Best home warranty for: HVAC coverage
Plans: 2 plans + optional add-ons
Premiums: $28–$43 per month
Service fee: $75
Availability: Not available in AK, CT, DE, HI, IL, LA, MA, ME, MN, NH, NJ, NY, ND, RI, VT, or WI
BBB rating: B

Score
7 / 10

Types of home protection plans

There are three types of home warranty plans that can cover the costly repairs and replacements of household appliances: a home warranty, homeowners insurance, and a manufacturer’s warranty. Here’s everything you need to know about all three plans.

Home appliance insurance vs. manufacturer’s warranty

A manufacturer’s warranty is a guarantee from an appliance manufacturer—such as Samsung, Frigidaire, or GE—that its product will perform as advertised for a specific amount of time (usually one to two years). However, some manufacturers might cover expensive components—such as a motor—under an extended warranty for a longer period of time.

If you want to cover an electronic or specific home appliance, you’ll have to register your product at the time of purchase to activate your coverage. The manufacturer will outline procedures for you to follow in the event that a covered appliance needs service while it’s under warranty.

Appliance insurance Manufacturer’s warranty
Required? Optional Optional
Cost $25–$67 per month Up to $125 per product per year
Coverage Covers most home systems and appliances Only covers registered appliances and electronics
Exclusions Age or brand don’t matter, but companies are not liable to match brand, dimensions, or color Only covers the registered brand name and specific model at the time of purchase
Coverage length 12 months with the option to renew 1–2 years unless you buy an extended warranty
Other factors to consider Transferable between seller and buyer at closing Non-transferable between buyer and seller during a home sale

Home appliance insurance vs. homeowner insurance

Homeowners insurance protects your home in the event of theft or natural disasters—such as a tornado or fire. Unlike appliance insurance, homeowners insurance is required by mortgage lenders before you can close on a house.

Homeowners insurance covers structural and property damage in cases of perils, liability if someone is injured on your property, property lost through theft or damage, and short-term housing costs in the event that your home becomes uninhabitable due to damage or disaster.

Appliance insurance Home insurance
Required? Optional Required
Cost $25–$67 per month $600–$2,000 per year
Coverage Most home systems and appliances Structural damage, theft, liability, and short-term housing costs
Exclusions Coverage is limited to items explicitly written into the contract that break down due to normal wear and tear Coverage is limited to perils—such as natural disasters and theft—named by the insurance policy
Coverage length Renew coverage annually or pay in monthly installments Premiums are bundled with mortgage payments
Other factors to consider Coverage is capped at a certain dollar amount, so the provider may not pay for the full cost of the repair or replacement There’s a set deductible that you’re responsible for paying prior to the insurance company

What does home appliance insurance cover?

Here are some common appliances that are covered under home appliance insurance:

Appliance Average lifespan Cost to repair Cost to replace Potential savings
Furnace 16–25 years $285 $4,249 $1,500
Air conditioner 15–20 years $347 $5,413 $1,500
Water heater 8–12 years $546 $1,065 $1,037
Refrigerator 14 years $310 $1,925 $1,306
Range 14–19 years $150 $1,675 $1,607
Built-in microwave 8 years $125 $408 $1,485
Dishwasher 12 years $150 $1,000 $1,683
Clothes washer 12 years $310 $1,250 $1,466
Dryer 13–14 years $250 $1,075 $1,466

Most home warranty companies have three levels of coverage—a basic plan that covers appliances and/or home systems (such as air conditioning), a combo plan that includes coverage for additional items like a Whirlpool bathtub or a clothes washer and dryer, and optional add-ons for special features like a pool, spa, or guest house.

Home warranty limitations and exclusions

As seen in the table above, most home warranties will set limits on repairs and replacements at a specific dollar amount. For example, your home warranty company may pay for a refrigerator replacement up to $1,306, leaving you to pay for the remaining $620.

Additionally, many home warranty companies don’t cover appliances or systems that have pre-existing conditions or have been improperly installed or inadequately maintained, which often includes rust and corrosion.

Before purchasing home appliance insurance, schedule a home inspection and have your house evaluated by a real estate agent to ensure that your systems and appliances are functioning and in good working condition. You’ll also want to read your contract’s terms and conditions and make sure you know how much your warranty company will pay for covered services.

How much does home appliance insurance cost?

Depending on the type of coverage you purchase, a typical appliance insurance plan will cost between $25–$67 per month. For more comprehensive plans, you can expect to pay upward of $50–$75 per month. In addition to this monthly premium, you’ll likely pay a trade service call fee, or deductible, that ranges between $75–$125 whenever you contact the home warranty company for a service.

The overall cost of your home appliance insurance will vary by state, the company you purchase coverage from, and the level of coverage you purchase. Note: the size and age of your home, appliances, and systems should not affect coverage or costs unless you live in a brand new home, which should be covered by a builder’s warranty, or a house that’s larger than 5,000 square feet.

Are home appliance warranties worth it?

Yes, we believe home warranties are definitely worth the investment. Not only can these home protection plans save customers thousands of dollars, they can give homeowners peace of mind. When a covered item breaks under your plan, you can rest assured that an expert will handle the problem in as quickly as 24 hours. Some customers have even reported same-day appointments.

Additionally, a home warranty gives homeowners access to a whole network of local professionals. Instead of nagging your neighbor for the name of their plumber again, or spending hours reading reviews of technicians online, your home warranty provider will schedule an appointment with a local and licensed contractor in your area for you.

How does home appliance insurance work?

  1. Call your home warranty company’s customer service line or file a claim online. Some claims may not be accepted if the appliance or system isn’t covered by your home warranty plan or was subject to code violations, improper installation, or unusual wear and tear.
  2. Once customer service approves the claim, the home warranty company will hire a local contractor to make an assessment or allow you to choose your own trusted contractor.
  3. The service technician will call you to schedule a time to either repair or replace your broken system or appliance.
  4. You’ll pay a small service fee to the contractor when they arrive at your home. Before you purchase a home warranty plan, ask your provider if you’ll be charged service fees for every repeat visit or if repairs are guaranteed for a window of time—usually 30 to 90 days.
  5. Once an appointment is made, the service provider diagnoses the problem and recommends either repairing or replacing the item. If a repair is necessary, the technician will typically fix it during the first visit. If a replacement is necessary, you’ll likely have to schedule another appointment for the technician to come back and reinstall the appliance or system.

Note: Most home warranty companies aim to schedule service within 48 hours of receiving your claim; however, this process can take longer on weekends and holidays. Since it may take a couple of days to dispatch a licensed contractor to your home, contact your home warranty company as soon as you notice an issue with your system or appliance.

Do you need insurance for your appliances?

While appliance insurance isn’t mandatory, it gives homeowners peace of mind against costly repairs and replacements. It’s a given that systems and appliances will wear down and break over time, so we recommend home appliance insurance for anybody who owns a home.

In particular, the following groups of people will benefit from a home warranty:

  • First-time home buyers—If you’re strapped for cash, invest $30 a month in a basic home warranty plan.
  • Homeowners of older homes—Most home warranties will cover systems and appliances regardless of age, as long as they were properly installed and are sufficiently maintained.
  • Home sellers—Sellers can use a home warranty to expedite the closing process. At closing, sellers often transfer the home warranty to the buyers, covering their repairs for the first year.
  • Realtors—Listing agents will enjoy the assurance that repairs will be taken care of while the house is for sale.
  • Rental property owners—Rental property owners can streamline maintenance by letting the home warranty provider handle claims.

Factors to consider before buying home appliance insurance

Before buying a home appliance insurance plan, there are a variety of factors to consider, such as coverage, pricing, customer service, and more. Here are a few factors to consider when searching for a home protection plan:

  • Type of coverage—Think about whether you want to cover just systems, just appliances, or a combination of both. Most home warranty providers will provide appliance-only, systems-only, and combination plans to meet your coverage needs.
  • Coverage limits—Your home warranty provider will likely have coverage limits, or coverage caps, on certain appliances and systems in your home warranty contract. Once this limit is reached, you’ll be responsible for paying the remaining costs for either a repair or replacement.
  • Pricing—The cost of monthly premiums and service call fees will vary by provider. If you’re on more of a budget, we recommend Select Home Warranty for its affordable premiums and service fee. However, if you want more comprehensive coverage and have a little more room in your budget, American Home Shield may be a good option.
  • Claims process—Most home warranty providers will approve claims within 24–48 hours of receiving one. Though this is pretty standard, not all companies follow this timeframe and some will wait as long as four days to send a technician out to your home.

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