Most of us try to plan our daily schedules perfectly to avoid any last-minute hassle. We set our alarms, make a list of things to do, and ensure everything is in order. But, sometimes, that is just not enough. Out of the blue, some interruptions like a wobbling washing machine, a warm or a leaky refrigerator, a clogged sink, or a malfunctioning gas stove can sabotage your plans. A non-performing appliance can set off a domino effect of chaos, sending your schedules for a toss. Well, if you have insured your appliances, you can be saved from such eventualities.

In this article, we’ll talk about everything you need to know about appliance insurance – what’s it all about, what’s covered, how to choose the right one, and much more.

How does home appliance insurance work?
In simple terms, home appliance insurance is a contract that covers appliance repairs and the cost of essential spares in the unfortunate event of a breakdown. When you have insurance, all you have to do is call the service center. They will inspect your appliance and set the problem right. If the device is severely damaged or cannot be repaired, they will provide you a replacement. The only expense that you will have to bear is a service fee. No additional fees will be charged irrespective of the extent of damage or repair.

Why do you need appliance insurance?
The appliance you bought could sometimes be costly. It could be brand new or may have come as part of an older home you purchased. It could be a gift you received. You could have bought it in an exclusive store or an online e-commerce website. Despite the best guarantees, five-star reviews, and promising commercials, there is a good chance that your appliances may malfunction and need repair. Over and above, there could be damages caused by external factors beyond your control like fire, typhoon, or even theft.

In many instances, major repairs and replacements tend to be expensive. Not all these costs are covered by the warranty provided by the manufacturer at the time of purchase. Therefore, additional insurance protects you from unexpected expenses.

Which appliances are covered by insurance?
Insurance coverage is available for both simple and complex standalone appliances and home systems. While standard plans generally cover smaller and simpler appliances that are not expensive to repair, a higher plan includes most devices and systems in your home. Appliances generally covered by insurance include:

• Ceiling fans
• Exhaust fans
• Heating systems and furnaces
• Whirlpools
• Water heaters
• Blenders and food processors
• Ovens
• Lawn sprinklers
• Cooking range
• Stove and hobs
• Built-in micro ovens
• Garbage disposal units
• AC units furnaces
• Alarms and doorbells
• Generators
• Garage doors
• Automated blinds

Types of home appliance insurance policies

Homeowner’s insurance policy
This mandatory insurance covers repairs and damages of your home and its belongings from perils due to fire, typhoons, hail, lightning, floods, explosion, theft, riots, etc. In such policies, appliances are considered personal property, and you can opt for personal property coverage as an additional component of your homeowner’s policy. However, if you want to include all your appliances in homeowner’s insurance, the limits will be very high. Premiums are then bundled with your mortgage payments. Suppose your device is damaged by any unforeseen cause included in the policy. In that case, the appliance will be replaced, or you will be paid cash (usually much less than the machine’s actual cost).

Alternatively, you have the option to add another component known as equipment breakdown coverage to the homeowner’s policy. A few of the costlier appliances and systems like refrigerators, air-conditioners, heating systems, swimming pools, well pumps will be covered in such a policy. Remember, normal wear and tear will not be covered, and only damages caused by unexpected causes like a sudden power surge, mechanical malfunction, electrical arcing are eligible for coverage.

This policy is ideal for those who have larger houses with multiple home systems and appliances. First time home buyers, sellers, and realtors prefer such policies as it can easily be bundled into mortgage payments if required.

Individual appliance insurance
This is similar to car insurance and can be obtained after the manufacturing warranty period expires. The plan’s cost largely depends on the cost of the appliance and the duration of coverage you choose. You will continue to pay a monthly, quarterly, or annual premium, even if the appliance is working fine. If the device is already covered under a homeowner’s insurance policy, you cannot get additional insurance for the same.

The total cost of appliance insurance has two parts – a monthly premium and a service fee. The premium will depend on the number of appliances that you have insured. The service fee is payable only if you need a service for the insured appliance. Replacement and repairs are all done at no additional cost once you have appliance insurance.

Such individual appliance policies are cheaper and ideal for students, people living in shared spaces or apartments, and those with minimum appliances. Individual insurance is available for all types of appliances.

Multiple appliance insurance
It is quite safe to assume that most households have at least three essential appliances. Purchasing insurance for each one individually, tracking their premiums and due dates could be quite cumbersome. Therefore, most companies offer plans where you can insure multiple appliances in one single policy. These are fixed plans with coverage available for a specific list of devices listed in the plan. The only drawback is that you might not own one or more appliances listed as part of the policy but still end up paying a premium for them. Companies also offer flexible plans that allow you to customize a policy just your own appliances.

For both the above plans, if you encounter a problem with the insured appliance, all you need to do is call the service provider and pay the service fee. They send the technician, have the device evaluated, and do the necessary repairs or replacement. The company bears the entire cost of repairs or replacement. If you require the service more than once, you have to pay the service fee every time.

This policy is most famous, as many households have multiple appliances today. Anyone with more than three or four appliances can benefit from this type of plan. You can choose monthly, quarterly, and annual plans, and the amounts will be auto-debited from your bank account or credit card.

Points to consider before insuring your appliances
A large number of companies have multiple plans and combinations. Hence, you need to keep a few things in mind before choosing a plan.

• Manufacturer warranty vs. home appliance insurance
  First, you need to understand the distinction between warranty and insurance. Manufacturer warranty becomes active at the time of purchase by default and is valid for a year or two. It is a contract that guarantees service for expected problems only. It can be further extended for two to three years and is called an extended warranty. On the other hand, appliance insurance is coverage for unexpected problems not covered by a warranty. For example, while insurance can provide coverage for replacements, the warranty cannot.
• Do not pay for what you do not own
  If you choose a bouquet appliance insurance policy, you might end up paying for appliances that you do not own but are in the plan. For example, if you have seven appliances and opt for a fixed policy with nine appliances, you pay a premium for two appliances that you don’t own. Such policies have value only if you own all the appliances listed in the plan. If you have only a few appliances in your house, go in for a flexible policy that allows you to choose the appliances you want to insure.
• Make a plan
  Make a two-column list – one of all the systems and appliances in your home that need insurance, and two, of those whose manufacture extended warranty is still valid. Look for plans that offer coverage for all your appliances in one plan. Buying multiple plans to cover all your devices is costlier. In such cases, opt for flexible plans with add-on options so that you can add more appliances as and when you purchase them.
• Compare multiple plans and companies
  Most insurance companies have online tools that help you calculate the cover you need and the premiums. Make a note of the best plans and choose accordingly. Cost, service, and period of coverage should be the top filters. Most companies offer add-ons; that is, you can add appliances to the original policy. Check how many add-ons are offered by each company and choose what offers you value for money. Talk to their customer support, look up reviews online, and use any special offers and discounts.
• Read the fine print
  A few plans come with a limit on the total cost of repairs and replacements. If your appliance has a critical breakdown and the cost exceeds the limit prescribed, you will have to shell out the excess from your pocket. Such scenarios could arise during the replacement of expensive appliances like air-conditioners, refrigerators, and dishwashers. Ensure that there are no hidden limits or caps so that you are not in for a rude shock later. One company may have a cap of $4000 on repairs and allow you to choose nine appliances. Another might give you a similar plan but with an option to provide coverage for your pool or spa. Ensure that there is a repair guarantee before enrolling. Do extensive research and make an informed choice.
• Age of appliances
  If your house is older, repairing the home systems can be expensive as they might require frequent and regular repairs. In such cases, it is better to go for a home warranty, which is nothing but a warranty on the combination of home systems and appliances. However, if you have purchased a new house with appliances, it is safer to choose a fixed appliance insurance plan as the risk of repair or breakdown is not high. Always insure once you notice signs of aging, rather than waiting for significant signs of repair.
• Have your systems and appliances evaluated
  If you are purchasing a house, get all the systems and appliances evaluated to ensure that they are in good working condition. This will also help you estimate future costs and choose insurance plans accordingly.
• Waiting time
  When you are doing your research, make a list of companies that give you the shortest waiting period for service before sending a technician. Most companies guarantee within 24 to 48 hours. Longer waiting periods can disrupt your domestic or official schedules further.

Conditions when appliance cannot be insured
When considering appliance insurance, it is also essential to keep in mind its limitations. The policy will not cover the following:

• Poorly maintained appliances that have rusted or corroded
• Faulty installation
• Pre-existing defects at the time of inspection
• Items already under coverage in a manufacture warranty or a homeowner’s insurance policy
• Items damaged by mishandling of appliances, like scratches and dents
• Secondary damage caused by a breakdown
• Warranty violations

Benefits of home appliance insurance

• Lesser risk of sudden or unexpected financial costs
  Minor repairs might not set you back financially. However, a breakdown of a heating system, an air-conditioning system, or garage doors that require replacements can cost you up to $1000 or more. Insurance provides cover against such financial risks.
• Less worry
  Most of us buy multiple appliances at different times. It isn’t easy to keep track of their warranty periods and apply for extended warranty periodically. Appliance insurance can provide bundled coverage to all the appliances at one go and save you the unnecessary bother of multiple reminders and trackers.
• Optimal coverage
  Insurance will provide complete coverage for all repairs and damages not covered by the manufacturer’s warranty. You can also choose the coverage amount you require depending on your appliances’ condition and increase it as they get older.
• Longer coverage
  You can get coverage for as long as the appliance is working, provided you have maintained it well.
• Guaranteed service
  Without insurance, you will have to compare rates and check with multiple engineers, but there is certainly no guarantee that you will get good service. With insurance, the insurance company takes up the responsibility and provides you with registered and verified technicians. Ensure to register a complaint and pay the service fee.
• Replacements
  If the technician decides that the appliance cannot be repaired, you can get a replacement, which is impossible if you only have a warranty.

The average cost of appliance insurance
It is estimated that the average cost of comprehensive appliance insurance is between $300 and $600 a year, breaking it down to about $50 a month. Apart from the monthly premium, you would have paid an enrolment fee at the time of purchase and is a nominal amount, which differs from one company to the other. Average service fee payable at the time of claiming the service is between $75 and $125. The average waiting period for the coverage to be active is about a month from the policy’s purchase date.