Equipment Breakdown Coverage: What You Need to Know

You wouldn’t want to be without a working air conditioner or refrigerator on a sweltering summer day — or without a water heater in the middle of winter. 

Equipment breakdown coverage can help. It covers heating and air conditioning systems, boilers and appliances when they break down due to electrical or mechanical failures. 

It’s just one more tool to protect your appliances and home equipment, in addition to other tools like home warranties, manufacturer warranties and the standard coverage provided by your homeowners insurance policy. Let’s explore what it is and why you might need it.

Key takeaways:

• Equipment breakdown insurance covers your appliances and other home equipment when they break down because of mechanical or electrical failures.
• Home warranties cover normal wear and tear and other damages to appliances and home equipment for a set period of time.
• Typical home insurance policies cover damages to your appliances, home equipment and other personal belongings caused by fires, lightning, theft and other named disasters in your policy.

What is equipment breakdown coverage?

Equipment breakdown coverage is an endorsement to your homeowners insurance policy that covers your appliances, heating and air conditioning systems and other equipment when they break down due to mechanical or electrical failures. 

In other words, it provides more coverage than a typical homeowners insurance policy, which covers damages to your appliances and home equipment due to fires, lightning, and other disasters outlined in your policy. 

Some common mechanical and electrical failures that you might face include ruptures or bursts, power surges, short circuits, motor burnouts, pressure system breakdowns or problems caused by not installing your appliances correctly.

Equipment breakdown insurance covers your appliances, heating and air conditioning systems and other home equipment when they break down because of mechanical or electrical failures. It doesn’t cover damage caused by normal wear and tear, rust, mold or not taking care of your equipment.

What does equipment breakdown insurance cover?

Equipment is a broad term that includes much more than just your appliances and your heating and air conditioning system. A good way to think about it is that, if it draws an electrical current from your home, it’s probably considered equipment. Here’s a more complete breakdown of what’s typically included in equipment breakdown coverage: 

• Appliances (refrigerators, freezers, ovens, microwaves, washers and dryers) 
• HVAC systems 
• Boilers, furnaces, sump pumps and water heaters 
• Computers and related equipment 
• Home entertainment equipment 
• Gym equipment 
• Home security systems 
• Jacuzzis 
• Solar panels
• Data restoration

What does equipment breakdown insurance not cover?

Equipment breakdown insurance doesn’t cover damage to your items caused by old age or basic wear and tear. It also doesn’t cover rust, mold, pest damage or other problems that result from not taking care of your equipment.

How much does equipment breakdown coverage cost?

You might expect to pay about $25–$50 per year for a standard equipment breakdown coverage plan that provides $100,000 of coverage. 

Also remember that you’re responsible for paying your deductible before your insurance company will help you pay to repair or replace your equipment. Equipment breakdown coverage typically includes its own deductible that’s separate from your policy deductible. A common equipment breakdown coverage deductible is $500, regardless of what your policy deductible is.

Typical equipment breakdown coverage plans provide $100,000 of coverage and come with a $500 deductible that’s separate from your policy deductible.

Equipment breakdown insurance vs. other coverage options

There are several different options when it comes to protecting your appliances and other equipment in your home. Let’s explore home warranties vs home insurance policies vs manufacturer warranties, what they cover and how they differ from equipment breakdown coverage.

Homeowners insurance coverage for appliances and other equipment

Typical homeowners insurance policies cover appliances and home equipment that are damaged by certain perils like fire, hail, lightning, theft and others. (This is part of your personal property coverage.) 

Equipment breakdown insurance picks up where your homeowners insurance policy leaves off and provides coverage for electrical and mechanical breakdowns.

Home warranties

Home warranties are separate from your homeowners insurance policy. Like equipment breakdown coverage, they cover a wide variety of appliances and systems in your home. 

Unlike equipment breakdown coverage, they cover costs arising from normal wear and tear and don’t provide protection against mechanical and electrical breakdowns. 

Home warranties typically cost about $300–$600 per year or more, according to Consumer Affairs. That’s significantly more expensive than equipment breakdown coverage, which usually costs about $25–$50 per year (though they cover different things).

A home warranty is separate from your homeowners insurance policy and costs about $300–$600 per year. Equipment breakdown insurance is an endorsement to your homeowners insurance policy and costs about $25–$50 per year.

Manufacturer warranties

Many appliances and other devices come with their own warranties, which usually range from one to five years. In many cases, you can also purchase an extended warranty. Relying on individual manufacturer warranties for your appliances could be a cheaper option than purchasing a home warranty.

Is equipment breakdown coverage worth it?

Remember that homeowners insurance covers your appliances and other belongings after certain disasters. If you’re worried about other issues like power surges and motor failures, you might consider equipment breakdown coverage. 

Additionally, you might consider this form of coverage to protect yourself after your warranties expire.

Equipment breakdown coverage for landlords

Like homeowners insurance, landlord insurance typically covers appliances and other equipment after certain covered perils. However, to protect the equipment on your property against everyday mechanical and electrical failures, you should consider adding equipment breakdown coverage to your policy. After all, malfunctioning air conditioners, refrigerators, water heaters and boilers not only affect you; they also affect your tenants and could result in lost revenue. 

You probably don’t typically think about your appliances and other equipment when they’re working properly. However, you certainly notice when they’re not working as they should. Make sure that you have enough coverage to protect your air conditioner, water heater, freezer and other essential items in your home. 

Hippo’s policies offer equipment breakdown coverage options and include some of the most comprehensive coverage in the industry. We’ve added four times more coverage than our competitors for items like home electronics and smart appliances. And we’re fast! Simply give us your address, and we’ll provide you with an accurate quote in as little as 60 seconds.