Home appliance insurance or the home appliance warranty policy refers to an insurance plan, which includes the cost of repair and maintenance of the household appliances. Unlike the other insurance plans that cover only unexpected and sudden events, home appliance insurance will cover the expected wear-and-tear of pivotal home appliances. These policies offer broad coverage. However, finding the perfect insurance policy requires a lot of understanding; you have to find a policy that covers appliances that are maximum at risk.

What is appliance insurance?
It is a policy that will cover the cost of repairing and replacing the systems and the components in your home. It is not like your homeowner’s insurance. So, it wouldn’t protect you from certain covered risks; rather it would cover all the day-to-day breakdown or deterioration of the different appliances in your house. Now, the appliances that are covered under the policy would primarily depend on your selected plan. Here, we have listed some items, which are usually covered in this insurance policy.

• Clothes dryer
• Oven
• Refrigerator
• Plumbing systems, which would include the stoppages
• Clothes washer
• Heating system
• Garbage disposal
• Water heater
• Dishwasher
• Kitchen Cooktop
• Ceiling fan
• Spa
• Septic system
• Built-in ovens or microwaves
• Ductwork
• Air conditioner
• Pool
• Well pump
• Door opener of garage
• Electrical system
• Central vacuum
• Lawn sprinkler
• Sump pump

Usually, you’ll get this insurance as a standard package, which would offer many appliances. So, if you want certain appliances to be included, you can pay an additional price. At times, the coverage of your appliance insurance plan might be split amidst the appliances and the systems. But what’s the difference? Systems would include things, which are spread across your home. It would include plumbing and appliances, which are standalone items, such as refrigerators. Furthermore, certain systems or appliances might only be added at a higher cost. This additional cost that you pay for the inclusion of more items or systems is known as the add-on cost. It is primarily charged on items that are a risk to insure, such as sump pumps or the pools.

Hence, if you go shopping for appliance insurance, you must be aware of the different types. So, this insurance is often referred to as home repair insurance or home appliance warranty. Likewise, you also get extended warranty insurance, which primarily offers coverage for a specific appliance and not a group of different appliances.

Working of appliance insurance

The appliance insurance policy works like a service contract, which guarantees the repairs and replacement of home appliances. Hence, whenever an appliance in your home stops working the way it should while your contract period of the appliance insurance is still active, you can immediately get in touch with an appliance insurance service provider. The insurer will then send a technician at your place to analyze the problem and then take measures to offer adequate repair.

In case the technician finds out that the home appliance has been broken beyond a possible repair, they would replace the appliance. When this home appliance is covered under insurance, you’ll have to pay only a small fee, which is less than $100, irrespective of its use. At times, the appliance insurance is sold as one package in addition to the coverage for the home’s systems, like electrical, plumbing, HVAC, which is referred to as home warranty. The functioning of appliance insurance includes the following aspects:

• Coverage
  The appliances, which are included under this type of insurance policy, depending on your chosen plan. Usually, appliance insurance includes appliances that are rather expensive to repair. These include cooktop, dishwasher, and washing machine. Certain policies also cover a few obscure appliances, such as ceiling fans or doorbells, at an extra fee.
  If you desire home appliance insurance only to cover a particular appliance, such as a food processor or a blender, you would want to consider getting a manufacturer’s warranty from the maker of the appliance. It costs less than insuring the different appliances found at home.
  Further, you should thoroughly read the terms and conditions of the insurance policy before signing a contract with any insurance provider. It will be extremely helpful in finding out what’s included in the plan. Please know that usually, all the insurance plans, which are appliance-only, do not cover the ACs, pools, septic systems, or garage doors. So, if you want to include these, you should opt for a complete home warranty cover.

Costs
As far as appliance insurance is concerned, two key costs are involved in it. First is the monthly premium, which you have to pay every month, and the second is the service fee. Similar to the homeowners or auto insurance, you are bound to pay a fixed premium every month. So, whether the appliance breaks down or not, this is the fixed cost that you’ll have to bear toward maintaining your coverage.
The amount of premium that you are to pay every month depends on a multitude of factors, such as the location of your house and the number of appliances that you desire to cover in the insurance plan.
Moreover, every time you call your insurance provider and they send a service provider at your home, you’ll have to pay a certain service fee. At all times, this service fee is charged at a certain flat rate, which can be negotiated at the time when you sign the insurance contract. This fee has to be paid every time you need a repair or replacement. After the repair or replacement work is done, the insurance company will cover the remaining part of the bill. This service fee is charged as an attempt to discourage any nuisance calls. In most cases, the fee is less than $100. Besides the premium amount, the insurance plan may or may not charge a deductible.

What does the appliance insurance cost you?

The cost of the appliance insurance depends on the degree of insurance coverage, and the insurer. However, in most cases, it could be anywhere around the range of $400-1,000 per annum. If you desire a policy that covers more appliances and offers you additional coverage on risky appliances, it would cost you a higher premium.

As discussed earlier, a service fee is also charged on the appliance insurance policy every time you request a repair or replacement.

For instance, if your microwave oven breaks down, you’ll call your appliance insurance agent. He’ll take down your request and send a handyman or a contractor at your home. The contractor will closely examine the issue. Then, he’ll perform the repair on the damaged component or replace the component if it is not repairable, and then once the service is complete, he’ll generate a bill. Of this total bill, you’ll have to shell out the service fee, a fixed amount that has to be paid irrespective of the extent of the damage. A few insurers will provide you with an option of a higher service fee and a lower premium.

So, if you avail of an insurance policy, and agree to pay anything between $75 to $125 as a service call fee when you make a request, you’ll be eligible for a lower monthly premium.

Things to consider when looking for an appliance insurance policy
Now, whenever you are shopping for an appliance insurance policy, the adequate alternative is the one that covers all the appliances you require at a decent cost. Herein, the cost might be variable, and thus, different for different people. However, it is your responsibility to research different policies and check their customer ratings thoroughly. In addition to that, you can follow these tips while purchasing an appliance insurance policy. These include:

• Opt for a policy that covers all the specific appliances (or one, which covers most of them)
  Your appliance insurance plan wouldn’t be good enough if it covers the systems and devices that aren’t even there at your home. A few policies come with pre-determined packages and cover a fixed list of appliances.

For instance, if you do not have a clothes dryer or a clothes washer, in the standard appliance insurance policy, it means that you are paying a premium to protect appliances that you do not even have at your home. If you do not have too many appliances at your home, you should look for appliance insurance that offers you a good value for all the individual appliances that you have over a comprehensive insurance policy. Another way for this is to opt for an insurance policy via a warranty offering company. This will give you a chance to customize your policy. You can now pick the appliances that you would specifically want to be covered in your policy.

• Be aware of the limitations of your home appliance insurance policy
  Now, read through the contract of your home appliance insurance policy to understand its limitations. At times, the appliances that you own are all covered in the policy, but despite that, the assessment, replacement, or repair is only included to a certain limit.

For instance, if you get your home appliance insurance from American Home Shield, you’ll see that their policy covers all the appliances, like the dishwasher or the refrigerator, but only up to a limit of USD 3000 per item. Hence, you need to carefully read the policy to ensure that the coverage you are getting is adequate.

• Examine the risk of a particular home appliance going out of order
  When you live in a relatively newer house, and all the appliances in the house have been purchased recently, your appliances are relatively less likely to malfunction or might be covered under the manufacturer’s warranty. In this case, you can skip buying insurance. However, if you are uncomfortable with any contingent repair costs or are conservative when it comes to finances, you can opt for home appliance insurance as your go-to method of replacing the uncertainty of a massive repair cost. You need to pay a fixed premium towards insurance, irrespective of living in a new house. However, if you live in a relatively older house and warranties of all your appliances have already expired, it does seem like a sensible choice to go with home appliance insurance as a means to mitigate the risk.

Some appliance insurance companies that you can trust
For homeowners, who are looking for an appliance insurance company, there are a plethora of options available. The best place that you can start looking for is the National Home Service Contract Association (NHSCA) website. It is a non-profit organization that requires its members to adhere to the stated guidelines firmly. On the website, you can find a map of insurance companies, available in your state. Here, we are listing out some good appliance insurance companies that you can seek help from.

• American Home Shield
  It is one of the top-rated insurance providers for home appliances. With them, you can find coverage options, which include an appliances plan available for USD 70 per month, a system insurance plan for a price of USD 70 per month, or a combination plan priced at USD 80 per month, which will cover the 21 appliances from both the policies. You can also personalize and build your policy at a starting price of USD 75 per month.
• Select Home Warranty
  Though this insurance provider does not give you an extensive plan as the former, it does insure the appliances at a lower rate. So, it is just as good and can be given fair consideration.
• Choice Home Warranty
  Both Select and Choice offer a more or less similar package. So, this, too, is a great choice when you are seeking appliance insurance.