The first thing you must understand is that your homeowner’s insurance will only cover damage that your home sustains from natural disaster and theft. To cover your appliances, electrical system, or plumbing system breaking down or malfunctioning, you need to obtain a separate policy of insurance for household appliances. An appliance insurance policy will cover the expense to repair or replace, minus a small service call fee that you’ll pay out of pocket.
This is particularly true when you have an older home with older appliances. Appliance insurance coverage will save you from the expense of repairing or replacing things like your washing machine, clothes dryer, dishwasher, and more. It can also save you from having the pay expensive electrician or plumber bills too.
Even when you purchase brand-new appliances from a big-box retailer, their appliance repair plans will only last for a certain time and they may not cover ever everything like a home appliance insurance policy, which is separate from your homeowner’s insurance policy, covers.
No matter what situation you find yourself in with your appliances, you should have a clean and thorough understanding of how an appliance warranty works versus appliance insurance. There are several options available either ways, choose the one that will work best for you and your budget.
Extended Appliance Warranty and Appliance Insurance
Most big-box retailers that sell appliances will offer you an extended warranty plan in addition to the manufacturer’s warranty that comes with each unit. There is a great difference between the appliance warranty they offer and the appliance coverage you have under a plan with home insurance for appliances that are purchased separately from your homeowner’s insurance.
Basically the warranty that retailers offer is for repairs that the manufacturer warranty doesn’t cover. The manufacturer warranty will come with the purchase of the appliance, whereas the retailer’s extended warranty is an additional cost. Without the extended warranty, there is nothing to assist you in repair or replacement once you get the appliance home if something breaks that is outside of the manufacturer’s warranty.
There are third party appliance insurance companies that will work with various retailers to offer customers a “combo plan” This enables the customer to add a new appliance to an appliance plan they already have in place. Labor and parts for repair of failure due to normal wear and tear are covered under this style of appliance insurance. They type of coverage can become expensive, as the company often requires a differeny policy for each appliance.
What About Home Warranties?
A home warranty plan is a one-year service contract that is like a policy of insurance for household appliances through a company that specializes in home warranties. A home warranty plan will cover the cost to repair or replacement of any appliances or systems you choose to cover. Rates vary from state to state, city to city, but the average expense typically runs between $250 to $450.
With such a warranty, when an appliance like your dishwasher, refrigerator, or washing machine breaks down, you call the warranty company and they will dispatch an experienced, licensed technician to you. You will be responsible for a nominal service fee charge, typically $50 to $75 per visit.
Almost all your appliances can be covered under one home warranty plan. In most cases, the age, make, or model number are not a factor in being covered, but they will need to be working order before they can be covered. You can also choose a plan that covers your electrical and plumbing systems as well.
Not all home warranty companies are the same. Choose one that has a long-standing reputation and shop the fees and coverages. Ask about their service call fees, and if the policy automatically renews each year. Request a list of current references and check with those homeowners regarding their satisfaction with the company.
