How to Find The Best Home Appliance Insurance Policy

Home appliance insurance, also known as a home appliance warranty plan, covers the cost of repairing and replacing household appliances. Unlike most insurance policies, which cover unexpected and accidental events, home appliance insurance covers normal wear and tear. Finding the best policy for you entails determining whether your appliances are at risk and then finding a policy that meets those requirements.

What is home appliance insurance?

The cost of repairing or replacing devices or systems in your home is covered by home appliance insurance. Home appliance insurance, unlike homeowners insurance, protects against routine deterioration or breakdown of devices in your home rather than specific covered perils. Depending on the policy you choose, the appliances covered may differ. Here are some of the items that home appliance insurance may cover.

  • Plumbing system, including stoppages
  • Clothes washer
  • Clothes dryer
  • Heating system
  • Water heater
  • Garbage disposal
  • Refrigerator
  • Oven
  • Built-in microwave
  • Cooktop
  • Dishwasher
  • Ductwork
  • Garage door opener
  • Air conditioning
  • Electrical system
  • Ceiling fan
  • Pool
  • Central vacuum
  • Sump pump
  • Well pump
  • Lawn sprinkler
  • Septic system
  • Spa

Home appliance insurance is typically sold as a standard package covering specific appliances, with more expensive plans covering a wider range of items. Coverage may be divided between systems and appliances at times. Plumbing, for example, is distributed throughout your home. Appliances, such as refrigerators, are stand-alone items. Furthermore, some appliances or systems, such as pools or sump pumps, may only be included at a higher cost or as an add-on if they are particularly risky to insure.

When looking for home appliance insurance, keep in mind that it can come in a variety of names and forms. Home appliance insurance policies, for example, are also known as home appliance warranties or home repair insurance. There is also extended warranty insurance, which covers single appliances rather than groups of appliances.

What does home appliance insurance cost?

Home appliance insurance can range from $400 to $1,000 per year, depending on your insurer and level of coverage. According to the National Home Service Contract Association, the average cost of a basic contract is between $400 and $550 per year. Purchasing a policy that covers more appliances and choosing extra coverage for riskier appliances will raise your premium.

A separate service fee may also be applied to policies each time you seek repairs. For example, if your washing machine breaks down and you request that your home appliance insurer send a contractor to inspect the problem, you will be charged a fixed service fee regardless of the extent of the damage. Some insurers may allow you to pay higher service fees in exchange for a lower annual premium. If you purchase a home appliance insurance policy from American Home Shield, for example, you can choose to pay $75, $100, or $125 per service call. Lower monthly policy payments result from higher service call fees.

What should you consider when buying home appliance insurance?

The best home appliance insurance policy for you will cover the appliances you require at an affordable price — which will vary depending on your circumstances.

You should always investigate prospective companies' policies and customer ratings. Here are some things to consider when looking for home appliance insurance.

Get a policy that covers your specific home appliances

An appliance insurance policy will be useless if it covers devices and systems that you do not own. Many policies cover a limited number of appliances.

  • If you don't have a clothes washer and dryer, which are typically covered by standard home appliance insurance policies, you'll be paying to protect something you don't have. If you live in a small house or apartment with few appliances, it may be more cost effective to look into warranty plans for individual devices rather than a comprehensive policy.

Another option is to purchase a warranty policy from a company that allows you to specify which types of appliances will be covered.

Know the limits of home appliance policies

Even if your policy covers a specific appliance, repair or replacement may be limited to a certain amount. American Home Shield policies, for example, cover appliances such as refrigerators and dishwashers up to $3,000 per malfunction. Always read your policy to make sure you know how much coverage you're paying for.

Assess the risk of your appliances malfunctioning

If you have mostly newer appliances, you should be less likely to purchase home appliance insurance. Many of your appliances will likely still be covered by the manufacturer's warranty, and newer devices are less likely to fail due to wear and tear.

However, if you are fiscally conservative and are concerned about the risk of unexpected costs, home appliance insurance can replace the uncertainty of appliance breakdown with a fixed insurance payment, even if you live in a new home. However, if you live in an older home with expired warranties and aging appliances, insurance may be a prudent way to cover their depreciation.

Top home appliance insurance companies

You have several options when looking for home appliance insurance. The National Home Service Contract Association (NHSCA), a nonprofit whose members must follow certain guidelines, is a good place to start. It provides a helpful map of companies in your state.

The following are some well-known home appliance insurance providers:

American Home Shield

AHS offers an appliances plan for $70 per month, a systems plan for the same price, and a combo plan for $80 per month. The latter includes all 21 appliances covered by the appliances and systems plans. If none of these policies meet your requirements, AHS allows you to create your own policy, with prices starting at $75 per month and varying depending on the number of appliances chosen. At an additional cost, specialty items such as pools, spas, and well pumps can be covered. If you choose the combo policy, the breadth of AHS coverage is hard to beat, with 21 different types of appliances or systems covered.

Select Home Warranty

Select Home Warranty is less expensive but provides less coverage than American Home Shield. It's most expensive platinum policy is $42 per month, but it excludes some appliances that other insurers cover, such as doorbells and smoke detectors. It also includes optional add-ons like pool and sump pump coverage. If you want a simpler, less expensive policy, you can go with the bronze plan, which costs $36 per month but excludes some major appliances and systems, such as water heaters and plumbing.

Choice Home Warranty

The most comprehensive package from Choice Home Warranty costs $45 per month, but it covers fewer appliances than AHS. Premiums can be as low as $40 per month before potential discounts if you choose a more basic plan that excludes key appliances such as clothes washers and dryers.

We recommend that you shop around for a policy that best fits your combination of appliances and personal risk tolerance, given the varying coverage of these plans.