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Insurance is generally confusing when trying to work out what you are actually covered for, or what you need to pay out-of-pocket should something break. Homeowner’s insurance is among the most confusing of insurance policies since it is hard to tell what is covered in your policy. However, there are policies available that are a lot more specific. One of these includes appliance insurance.

While homeowner’s insurance policies usually only cover appliances for certain situations and only certain types of appliances, appliance insurance will cover your dryer or washer or any other essential appliance regardless of how they have failed.

What Is Appliance Insurance?

Similar to things that you insure with other policies, appliance insurance is also known as a “home warranty” and is designed to protect you along with your wallet. Should your oven, refrigerator, or washer need replacement or fixing, appliance insurance will cover these costs, and assist with repair and maintenance services. In some cases, appliance insurance can be an “extension” of a home warranty policy, or you can choose to buy it separately for items such as a swimming pool or hot tub.

What You Need To Know About Appliance Insurance

To begin with, similar to most insurance plans, they won’t cover any pre-existing problems. However, while a homeowners insurance policy will only cover fire damage or theft, appliance insurance covers your appliances when something breaks down due to general wear and tear. It is also a good idea to go through the exclusion list of the policy, to understand what is covered and what is not.

When something does break down, your first step involves contacting your insurance provider to file your claim. Once the request has been confirmed, you can then contact an “approved” contractor to carry out the repair work. At this stage, a service fee (which we will discuss in the next point) will be collected to sort out or determine the issue.

Before you decide on what policy to take out, it is important to understand what your plan covers along with the reputation of the business that you want to buy the plan from. Go over the fine print to check for any hidden clauses or fees, and verify if an appliance breaks whether you can claim for a replacement, or does the policy only cover repairs? When it comes to emergency situations, including your furnace failing in the middle of the night, make sure you choose a company that is available 24/7 for added reassurance.

What Can You Expect To Pay For Appliance Insurance?

Depending on the plan type you have decided on and the coverage amount you are interested in, the annual premium for these policies usually ranges between $250-$500 in cost. This premium covers HVAC systems, electrical work, plumbing, and just about any other major appliance. Your dryer or washer might be excluded which is why you need to go through the policy very carefully to understand what is covered in the plan. When you file claims, there is usually a deductible and a “service fee” which is typically around $50.

Do I Really Need Appliance Insurance?

There are many good reasons why it is a good idea to cover your appliances with this type of insurance policy. If you are in the process of selling your home that is older than 10 years, insurance usually entices buyers. At the same time, most furnaces and water heaters generally last between 10 to 15 years, so when a replacement or repair on significant items such as these becomes imminent, appliance insurance can help you to save a lot of money. Should such an important appliance break down, the insurance costs compared to the amount you would have had to pay out of your own pocket cannot be compared.

For premium financial protection, you should have both homeowner’s insurance and appliance insurance. You might take care of your home, but it is also natural for appliances to break down or malfunction over time regardless of how well you looked after them. In these cases, an appliance insurance policy can go a long way to saving loads of money and time.