Written by Andy Gurczak

September 19, 2022

How Does Home Repair Insurance Work?

How Does Home Repair Insurance Work?

Homeowners’ insurance will cover damage from unexpected and sudden perils, like hurricanes, fire, and hail. However, it excludes insurance coverages if the damage stems from everyday use and wear and tear to appliances, HVAC systems, etc. Therefore, if you feel you need insurance coverage for those items, you need to know the answer to the question: how does home repair insurance work?

In short, home repair insurance is a service contract between homeowners and home repair insurance companies. They also call home repair insurance a home warranty or home maintenance insurance.

Homeowners pay a monthly insurance premium for financial protection against costly, though the often routine, breakdown of a home system or appliance.

Consequently, if items need to be repaired or replaced, the home repair insurance company covers the cost.

What Does Home Repair Insurance Cover?

Generally, a standard homeowners’ policy excludes the coverage included in home maintenance insurance. For instance, if your air conditioning unit stops functioning because of a mechanical failure, your home maintenance insurance would cover the cost.

Your homeowners’ insurance wouldn’t.

Some of the most commonly covered items are mechanical items like ceiling fans, indoor plumbing, and wiring systems, such as cable and electric lines.

In addition, the policy would cover most appliances, including washing machines, refrigerators, washers, dryers, dishwashers, and microwaves.

Likewise, the policy would cover air-conditioning units and furnaces.

Home repair insurance policies set specific dollar limits for certain items. For instance, a company may place a $1,500 limit on washing machines.

As a result, your coverage for a washing machine repair or replacement can’t exceed $1,500, even if your machine is worth more.

Of course, if you have low limits, you’d have to pay the difference between what your policy covers and the cost of the repairs or replacement. Most companies have different policy limits for different items. Therefore, you should read the fine print before purchasing a policy.

How to File a Claim

If something that is covered under your home repair insurance policy breaks, first call the company that issued the policy. Most companies will connect you with a local contractor they use in your area. Then, the contractor will then come to your home and inspect the damaged item.

If the item qualifies for coverage, you can expect it to be repaired or replaced if it is within the limits of your policy.

Do You Need Home Repair Insurance?

If many of your most expensive appliances and systems are approaching the end of their life expectancy, you’ll want to consider home repair insurance. That is, assuming you have kept good records of your home’s systems and appliances.

Conversely, if your home appliances and systems are on the newer end, you’re probably better off not purchasing coverage.

Likewise, if you are purchasing a new home with new appliances, you probably don’t need home repair insurance.

It’s common for new homes to come with a one-year warranty. However, these warranties typically exclude coverage for household appliances. Therefore, the warranty for a new home would cover systems like heating, air conditioning, and electrical. However, the warranty would exclude appliances like a dryer, microwave, or oven.

As a result, new homeowners should evaluate whether the repair or replacement of appliances alone justifies the cost of home repair insurance.

Of course, if a homeowner purchases new appliances, the homeowner could always buy manufacturer warranties for the appliances at the time of purchase.

What Does Home Repair Insurance Cost?

In fact, the cost of home repair insurance varies depending on the level of coverage. Home repair insurance typically costs $300 per year for basic coverage. Basic coverage only provides for repairs and replacements of appliances.

Factors such as where you live and the size of your home can raise or lower the premiums.

Notably, many companies also allow you to build a custom policy, which means you can select which items you want to be covered and exclude items to save money as you see fit.

More expensive policies provide coverage for swimming pools and hot tubs.

What if You Have an Old Home?

The major drawback to home repair insurance is that most companies have stipulations that require customers to perform routine maintenance. Indeed, homeowners must do this to keep covered items eligible for repair or replacement.

For instance, if your washing machine manufacturer recommends replacing water hoses every six months, your coverage would be void if you didn’t.

This may cause problems for buyers of an older home. Certainly, most homeowners won’t be able to provide proof of routine maintenance regarding the home’s appliances or HVAC system by the previous homeowners.

If a Hurricane, Fire or Some Other Natural Disaster Strikes, Call AllCity Adjusting

We are a family-owned claims company with five decades of combined adjusting experience. As a result, if there’s one thing we understand, it’s that you need 100% of your claim value.

If a storm or fire substantially damages your home, call us. We can walk through the claim process. Additionally, we can make sure you get compensated for the losses you suffered.

Remember, insurance company adjusters to pay out as little as possible in claims. However, we negotiate with adjusters every day on behalf of homeowners.

Therefore, we’ll get you every penny to which you are entitled.

If you are buying a home and want the peace of mind of a home warranty plan, there are several home warranty companies to choose from. Two of the most popular are American Home Shield and Liberty Home Guard.

Of course, we would be happy to discuss home insurance repair companies with you and what a plan covers. Moreover, we can help you select the one that’s right for you.

Call us at 844.692.3587 if you have questions. Or you can email us at info@allcityadhjusting.com.

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