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What Is Home Appliance Insurance?

By: Kealia Reynolds Home warranty, Insurance | Affiliate Disclosure

Home appliance insurance—also called a home warranty—is an optional service contract that protects major appliance and systems in your home when they break down. Commonly covered appliances include kitchen appliances—like refrigerators, dishwashers, and cooktops—as well as clothes washers and dryers and garage door openers. Most of these appliances are used every day—sometimes multiple times a day—and can, therefore, break down either unexpectedly or from normal wear and tear.

There are three types of home protection 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—from coverage and cost to the best home warranty companies and how to find the right plan for you.

What is home appliance insurance?

Home appliance insurance is an annual service contract that protects you from paying exorbitant repair and replacement costs in the event that a home system or appliance breaks down due to normal wear and tear. Instead of the full cost of repairing or replacing

an appliance, you’ll be charged a relatively small service fee to the professional contractor your home warranty company sends. A home warranty can save you thousands of dollars in the long run.

Home appliance insurance vs. manufacturer’s warranty

A manufacturer’s warranty is a guarantee from the 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 warranty coverage. The manufacturer will outline procedures for you to follow in the case 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 do not 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

Homeowner insurance protects your home in the event of theft or natural disasters—such as a tornado or fire. Unlike appliance insurance, homeowner insurance is required by mortgage lenders before you can close on a house. Homeowner insurance covers structural and property damage in cases of perils, liability if someone is injured on the 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 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 is a set deductible that you are responsible for paying prior to the insurance company

What is covered by home appliance insurance?

Home appliance insurance only covers items that have broken down due to normal wear and tear. Most home warranty companies have three levels of coverage—a basic plan that covers appliances and/or home systems, 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.

Are appliances covered by homeowner insurance?

Your appliances are covered by homeowners insurance if they are damaged or destroyed in the case of peril named by your insurance policy—not normal wear and tear. Perils include unexpected emergencies—like theft—or natural disasters—such as fire, tornado, or lightning strikes. If lightning strikes your home and fries your electrical system, it’s covered by your homeowner insurance—not your home warranty. However, if your 19-year-old refrigerator finally breaks down, you’ll call your home warranty provider.

What does a typical home warranty 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

Expert advice

We talked to Ron Shimek, President of Mr. Appliance (a Neighborly company), who shared advice on how to make appliances last longer.

Refrigerator:

  • Remove the kick plate from the bottom of the fridge, and clean the lint filters from the coils under the bottom.
  • Regularly clean the seals around the door. The seals keep the cool air in and the warm air out, so cleaning the seals keeps this working correctly.

Microwave:

  • To keep it running in top shape, make sure you wipe it down the microwave with a warm cloth on a daily basis. This will remove residue on the inside of the microwave that could prevent air from circulating inside the machine, which is how it heats food. 

Dishwasher:

  • Clean the food trap that’s at the bottom of the dishwasher. It’s there to catch food that’s washed off dishes, keeping it from getting stuck in the drain pump.
  • Do not to put sharp items on the dishwasher racks. They are made of metal and covered with plastic, so sharp items can cut the plastic covering, which later turns into rust and breaks down the machine.

Washing machine:

  • Replace the brittle, plastic hoses that come with the machine with steel, flexible ones that are made for long-term use. This one change will ensure that your machine lasts years longer than it otherwise would have.
  • Don’t overload the machine with clothes. This puts a strain on the motor, which will cause it to wear out faster.

Clothes dryer:

  • Scrub the lint trap with soap and water over the kitchen sink. Some dryers have a lint filter on the bottom or the back of the machine, so check yours and make sure you’re cleaning the lint from that on a regular basis.
  • Check the dryer’s load weight. Just like the washing machine, packing the dryer with clothes could wear out the motor over time.
  • It is also recommended to have a professional dryer vent cleaning at least once or twice a year.

Limitations and exclusions of home appliance insurance

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. Make sure you know how much your warranty company will pay for covered services and if there’s a cap on coverage.

Do home warranties cover pre-existing conditions?

The majority of home warranty companies do not cover pre-existing conditions with your systems and appliances. Although you do not need a home inspection to get home warranty coverage, an inspection may be helpful in the case that you must prove a condition is unknown to you.

Installation and maintenance

Many home warranty companies do not cover appliances or systems that have been improperly installed or inadequately maintained, which often includes rust and corrosion. Before purchasing a home warranty—usually purchased when buying a home—have your home systems and appliances evaluated by a real estate agent to ensure that they’re functioning and in working condition. If appliances are included in your home sale, request receipts of service from the sellers to provide the home warranty company.

Energy-efficient appliances

It’s also a good idea to schedule a HERS test to evaluate the energy efficiency of your home systems and appliances and see where there’s room for upgrades. Unlike a manufacturer’s warranty, home warranty companies aren’t liable for matching the brand, dimensions, or color of your appliances or systems but some will match energy-efficient models.

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 appliance plans covering additional items like a second refrigerator or swimming pool, you can expect to pay upwards of $50 per month. Additionally, whenever you contact the home warranty company for a service, you’ll likely pay a trade service fee, or service fee, that ranges between $75–$125.

Ultimately, the overall cost of your home appliance insurance will vary by state, depend on the company you purchase the 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 warranties worth the cost?

Yes, we believe home warranties are worth it. Customers could save thousands of dollars. You potentially pay a service fee of only $65 for a $1,500 repair or a brand new appliance.

In addition to financial savings, home warranties also buy homeowners peace of mind. When an appliance breaks and it’s covered under your home warranty, 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.

Lastly, a home warranty gives homeowners access to a whole network of local professionals. When you file a claim, your home warranty provider is responsible for scheduling an appointment with a local and licensed contractor in your area. You won’t have to nag your neighbor for the name of their plumber again, and you’ll save time reading reviews of technicians online.

How does home appliance insurance work?

The majority of home warranty companies aim to schedule service within 48 hours of receiving the claim; however, this process can take longer on weekends and holidays and it’s up to the home warranty company to decide whether your claim is an emergency. Since it may take a couple of days to dispatch a licensed contractor to your home, it’s essential that you contact your home warranty company as soon as you notice an issue with your system or appliance.

  1. First, call your home warranty company’s customer service or file a claim online. Note that some claims may not be accepted if the appliance or system is not 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.
  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 will be charged a service fee 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.

Who needs home appliance insurance?

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.

First-time home buyers

If you’re buying a home, chances are you’re overwhelmed and strapped for cash. To ease your mind of potential repairs you’ll now be responsible for, you can invest $30 a month for a basic home warranty plan. You can always cancel after you’ve settled in.

Homeowners of older homes

Homeowners of older homes will equally benefit from home appliance insurance. Most home warranties will cover systems and appliances regardless of age, as long as they were properly installed and are sufficiently maintained.

Home sellers

Home sellers can also take advantage of appliance insurance, which will cover appliance repairs that come up while their house is listed. At closing, sellers often transfer the home warranty to buyers, covering their repairs for the first year.

Realtors

Realtors can use home appliance plans to expedite closing. Listing agents will enjoy the assurance that repairs will be taken care of while the house is for sale and those who represent buyers will be able to offer peace of mind to anxious buyers.

Rental property owners

Rental property owners can streamline maintenance tickets from their tenants by letting the home warranty provider handle claims. The best home warranty companies are available 24/7 and will send out a licensed contractor within a few days.

What is the best home appliance insurance?

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 some tough questions, and negotiated prices to find out how low they would go. We also reviewed home warranties based on their Better Business Bureau rating, customer feedback, and ratings from other third-party review sites like ours. Here’s what we found:

The 3 best home appliance insurance companies in 2019

Name

Choice Home Warranty

Description

Best home warranty for: Overall coverage
BBB rating: B-
Availability: All states except CA and WA
Plans: 2 plans + optional add-ons
Premiums: $29–$42 per month
Service fee: $60–$75

Score
10 / 10
Name

American Home Shield

Description

Best home warranty for: Appliance coverage
BBB rating: B
Availability: Nationwide
Plans: 4 plans + optional add-ons
Premiums: $20–$65 per month
Service fee: $75–$125

Score
9.5 / 10
Name

First American

Description

Best home warranty for: Limited exclusions
BBB rating: B+
Availability: Not available in AK, CT, DE, HI, IL, LA, MA, ME, MN, ND, NH, NY, RI, VT, or WI
Plans: 2 plans + optional add-ons
Premiums: $28–$50 per month
Service fee: $75

Score
8 / 10

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