There are two options available to homeowners for appliance and home systems coverage: Equipment breakdown coverage (addendum to the homeowners insurance policy) and a home warranty.
So how do you know which one you have access to and what it will cover?
Let’s break them down…
Equipment Breakdown Coverage
As mentioned above, equipment breakdown coverage (EBC) can be added as an addendum to your current homeowner’s insurance policy, although not all insurance carriers have it as an option.
You will need to verify with your agent or insurance provider if this is available to you.
With EBC, any mechanical breakdowns must be deemed sudden, direct, and accidental in order to be covered.
EBC will provide policy holders with a “greener” option when replacing appliances and systems.
All replacements will be energy-star rated appliances.
Also, EBC allows you to use your trusted repair service provider to manage the replacement. There are also no square footage restrictions.
The EBC addendum usually adds a very small additional monthly cost to your homeowner’s policy with an additional deductible.
A home warranty is different from equipment breakdown coverage because it is a standalone service contract and comes with more specific limitations.
Home warranties are limited to single-family residences under 10,000 square feet.
If you recently closed or refinanced your home, a home warranty would not be available for 30 days.
The main difference in coverage is that a home warranty will cover general wear and tear on appliances and systems, but they will not cover accidental damage.
In the event of a breakdown, the homeowner calls a qualified professional within the warranty’s network of contractors. The typical length of the contract is a year and can be paid monthly or annually.
So, which type of coverage is best for you?
First, check to see if your current insurance provider has equipment breakdown coverage as an endorsement for your homeowner’s insurance. If they don’t, then you would have to get a new homeowner’s policy that does have EBC as an option.
Considering that EBC will completely replace your appliances and equipment for accidental breakdown, it might be worth it.
On the other hand, if you feel like your appliances are not at a higher risk of accidental breakdown, a home warranty will allow you to get maintenance performed on your appliances by certified contractors in-network.
With options for monthly or annual pay without needing to pay a deductible, a home warranty may be more cost-effective.
Whatever your needs are, Insurance Professionals of Arizona can provide you with insight and options for home and appliance coverage. Fill out the form below to contact us today.
We work with dozens of insurance providers to get you the most coverage at the lowest rate available.
If your current homeowner’s insurance provider does not offer equipment breakdown coverage or if you want to know more about home warranties, fill out the form below.
One of our experienced insurance professionals will call you on the same day and provide you with options for the coverage that’s just right for you.
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Now It’s Your Turn
I hope You Understanding Equipment Breakdown Coverage vs. Home Warranty: What’s the difference?
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