Appliance Insurance Is Making a Comeback — And Most People Don’t Even Know It Exists

What is appliance insurance and how does it work?

Appliance insurance, also known as home appliance insurance or appliance warranty, is a service contract that covers the repair or replacement of major household appliances. Unlike traditional home insurance, which typically protects against damage from events like fires or natural disasters, appliance insurance focuses specifically on mechanical failures and wear-and-tear issues.

When an insured appliance breaks down, the policyholder contacts the insurance provider, who then sends a qualified technician to assess and repair the problem. If the appliance cannot be fixed, the insurance may cover its replacement, often subject to certain conditions and limits outlined in the policy.

How do warranties differ from appliance insurance?

While both warranties and appliance insurance offer protection for your household items, there are key differences:

1. Duration: Manufacturer warranties usually last for a limited time (often 1-3 years), while appliance insurance can be renewed annually.

2. Coverage scope: Warranties typically cover defects in materials or workmanship, whereas appliance insurance often includes a broader range of issues, including normal wear and tear.

3. Multiple appliances: Appliance insurance often covers multiple items under a single policy, while warranties are usually specific to individual products.

4. Transferability: Appliance insurance can often be transferred to new homeowners, which isn’t always the case with warranties.

Can you insure aging appliances?

Yes, you can insure aging appliances, and this is one of the key benefits of appliance insurance. While many manufacturers’ warranties expire after a few years, appliance insurance can provide coverage for older items that are more prone to breakdowns.

However, it’s important to note that some policies may have age restrictions or may require an inspection before coverage begins. Additionally, premiums for older appliances might be higher due to the increased likelihood of failure.

How are homeowners using insurance to avoid surprise breakdowns?

Homeowners are increasingly turning to appliance insurance as a strategy to manage the unpredictable costs associated with appliance failures. By paying a regular premium, they’re essentially budgeting for potential repairs or replacements, avoiding the shock of a large, unexpected expense.

Many are also using appliance insurance to extend the life of their existing appliances. Instead of replacing an aging but functional appliance due to fear of impending breakdown, they’re opting for insurance coverage to keep it running as long as possible.

What are some little-known facts about appliance insurance?

Appliance insurance has some interesting aspects that many consumers might not be aware of:

1. Customizable coverage: Many providers allow you to choose which appliances to include in your policy, tailoring coverage to your specific needs.

2. Service call fees: While the insurance covers repairs, there’s often a small service call fee for each claim, similar to a deductible in other types of insurance.

3. Potential energy savings: Some policies include regular maintenance checks, which can help keep appliances running efficiently, potentially lowering energy bills.

4. Coverage limits: Policies often have per-item and annual aggregate limits, so it’s crucial to understand these when choosing a plan.

5. Bundling options: Some home insurance providers offer appliance insurance as an add-on, which can sometimes result in cost savings compared to separate policies.

What are some real-life examples of appliance insurance in action?

To illustrate how appliance insurance works in practice, let’s look at some common scenarios:

1. Refrigerator failure: A family’s 6-year-old refrigerator stops cooling properly. With their appliance insurance, they pay a $75 service fee for a technician visit, saving over $500 on the repair cost.

2. Washing machine replacement: An elderly couple’s 12-year-old washing machine breaks down beyond repair. Their insurance policy covers the cost of a new, comparable model, minus a $100 deductible.

3. Oven malfunction: A homeowner’s built-in oven stops heating evenly. The appliance insurance covers the specialized repair, which would have otherwise cost over $400.

4. HVAC system issues: A homeowner’s air conditioning unit fails during a heatwave. The appliance insurance covers the emergency repair, saving the homeowner from a costly out-of-pocket expense and prolonged discomfort.

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Provider	Coverage Options	Annual Premium Range	Service Fee
American Home Shield	Appliances, Systems, or Combo	$480 - $780	$75 - $125
Choice Home Warranty	Basic or Total Plan	$370 - $450	$60 - $85
Select Home Warranty	Bronze, Gold, or Platinum	$430 - $620	$75 - $100
First American Home Warranty	Basic or Premier	$420 - $480	$75

Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.

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As appliance insurance continues to gain traction, it’s clear that this often-overlooked coverage option can provide significant value for homeowners. By understanding how it works, its differences from warranties, and its potential benefits, consumers can make informed decisions about protecting their valuable household appliances. Whether it’s avoiding surprise breakdown costs or extending the life of aging appliances, this resurgent form of protection is worth considering in today’s home management strategies.