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More Americans are investing in home warranties to afford some level of protection for their major home appliances. Even the most luxurious kitchen and laundry appliances can malfunction or break down, and repairing or replacing them—especially if the manufacturer’s warranty has expired—is time-consuming, stressful, and expensive.
Homeowners who begin researching their options for appliance coverage can quickly become overwhelmed by the range of plans available. With policies that seemingly overlap or offer similar services, it can be difficult to know what to choose.
If you’ve started researching your home appliance protection options, you may be wondering how residential equipment breakdown coverage compares to standard home warranty coverage. In this article, we’ll go over the important differences.
Home Warranty Vs. Home Insurance
First, let’s cover the differences between warranties and homeowner’s insurance.
Insurance protects your home and personal property by paying out if they sustain damage from fire, lightning, or other natural events. Insurance will also cover losses sustained from theft. It will not cover appliances that break down due to general wear and tear.
A home warranty isn’t insurance, per se. It’s a service contract to maintain and repair home systems and appliances. These can include:
- Refrigerators
- Laundry appliances
- Cooking appliances
- Electronics
- Heating and cooling appliances
A home warranty won’t cover items that are stolen or destroyed in a natural event. They won’t cover items that are abused or purposefully broken.
Unlike homeowner’s insurance, however, a home warranty will cover items that break down from general use.
As you can see, there’s in fact little overlap between standard insurance policies and warranty plans. They are each applicable in different circumstances, so they actually complement each other quite well.
What Is Equipment Breakdown Insurance?
Home equipment insurance or equipment breakdown insurance is an addendum to a standard homeowner’s insurance policy. For an added charge, your insurance provider can repair or replace your home appliances if they spontaneously fail.
At first glance, this may seem as though simply adding equipment breakdown insurance to your existing insurance policy can render a home warranty unnecessary. This isn’t necessarily true, however.
Equipment breakdown policies usually stipulate that the appliance’s problem must be sudden, direct, and accidental. This means you’re protected against things like electrical surges and sudden mechanical malfunctions.
Equipment breakdown insurance, however, will not protect against general wear and tear.
Equipment Breakdown Vs. Home Warranty Coverage: Which Is Best for Me?
While standard homeowner’s insurance and home warranty coverage have little in common, there is a bit more overlap between home warranty coverage and equipment breakdown coverage. They both offer the possibility of replacing major appliances when they fail under certain circumstances.
A home warranty, however, can provide more sweeping coverage for systems and appliances throughout your home. It can also cover items that break down due to general wear and tear, whereas equipment breakdown insurance will not. Also important is that a home warranty can provide general maintenance and home services, while equipment breakdown insurance is relevant only when an appliance ceases to function.
And, notably, home insurance appliance breakdown coverage is not a guarantee. Not all insurance providers offer equipment breakdown insurance.
Equipment breakdown insurance is a nice value for a relatively little amount of money, but it could leave you with some gaps in coverage that a home warranty could fill. As always, it’s best to do your research, assess your needs, and compare your available plans.
We at Liberty Home Guard are invested in our customers. We work hard to provide affordable, comprehensive coverage that is tailored to homeowners’ needs. Reach out to our team to learn more about warranty options and how they compare to other appliance protection solutions. Use our website for a free quote, or call (833)-544-8273.