Home Appliances

Homeowner's insurance policies do not cover appliance damage and repairs, according to the Arizona Department of Insurance. Depending upon the age and amount of appliances in their home, homeowners may be hard hit by unexpected repair or replacement costs when their appliances break. With an appliance insurance plan, commonly known as a home warranty plan, an insurance agency will pay the full cost of repairs and replacements of broken appliances so that the owner of the property does not have to pay these costs out of pocket.

Considerations

According to the Arizona Department of Insurance, homeowners' insurance plans typically cover structural property damage resulting from fire, windstorms, lightning and hail. Home warranty plans can cover damage to heating, plumbing, electrical and ductwork systems. In addition, these plans cover damage to ranges, ovens, trash compactors, dishwashers, fans, sump pumps and water heaters, regardless of the age or model of household components and appliances. Insurers usually offer both a basic coverage package and an enhanced package, with the enhanced package covering a greater variety of appliances and systems.

Benefits

Home warranty policies typically cover normal wear and tear and repairs not covered by manufacturer warranties. According to American Home Shield, the cost of a furnace can average $270 to repair in the U.S. and $2,671 to replace, and an air conditioner costs an average of $2,069 to replace and $368 to repair as of 2010. Even small appliance repairs can quickly add up to over a thousand dollars annually. To ensure the job is completed properly, home warranty insurers subcontract repair and replacement work out to licensed local mechanics.

Fees

Appliance insurance policyholders will pay a yearly premium to receive protection. According to Fidelity Nation, the average cost for a home warranty usually runs between $250 and $400 as of March 2011. In addition, policyholders typically pay a small service fee to have an appliance repaired or replaced to prevent frivolous claims. After paying the fee, the insurer will cover the full cost of repair or replacement.

Claims

An appliance insurance plan typically provides claim service seven days a week, according to Wells Fargo. After an appliance breaks, the homeowner will call his insurance agency to report the problem. A skilled mechanic or technician prescreened by the insurance agency will then travel to the plan holder's home and fix the appliance. If a technician cannot fix the appliance, the insurance agency will write the policyholder a check to cover the cost of buying a similar model appliance.

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