Home appliances are machines, either electric or fuel-powered, used in the house to perform house chores or entertainment.
- Major appliances.
They can be termed as white goods because most of these appliances were painted white. They include dishwashers, freezers, refrigerators, kitchen stoves, washing machines and clothing dryers, microwaves, ovens, and lawnmowers.
- Small appliances.
Small household electrical equipment such as coffee makers, meat grinders, juicers, blenders, electric kettles, toasters, and rice cookers are portable and easy to install.
- Consumer electronics.
These appliances are used for entertainment or communication. They include TV sets, computers, answering machines, DVD/ VCR/CD players, and many others.
Manufacturers offer a warranty on a product for up to one year; afterward, the manufacturer is not responsible for the repair or replacement of the appliance in case of damage. Appliance protection plans offer an extended warranty on appliances at a certain agreed fee. Appliance protection plans vary in price and length of coverage depending on the type of appliance and the client’s budget. The cost of an appliance protection plan depends on the provider; however, most plans cost between $400 to $1000 a year. Risky or high price appliances, however, have higher premiums depending on the plan provider’s policy. According to the National Home Service Contract Association, a basic contract costs approximately $400- $550 per year. Issues covered by most appliance protection plans are:
- Failures due to wear and tear
- Failures due to power surge
- Food loss due to failure of refrigerator or freezer
- Complete/ total collapse of the machine due to natural causes
- Screen failure
- Mechanical and electrical failures.
Issues not covered are:
- Secondary damages when an appliance breaks down
- Appliances under a manufacturer’s warranty and home insurance
- Damages on the device before the commencement of the plan
- Breach of terms and conditions
- Improper installation and poor or failure of maintenance
- Damages resulting from pests and pets
- Washing Machines
- Cloth Dryers
- Air conditioners
- Hot/ cold water dispensers
- TV sets/ computers
- Wall Ovens/ ranges/ cooktops
- Trash Compactors.
Before settling on an appliance protection plan, it is crucial to consider the following factors:
- The current condition of the appliance.
A piece of equipment that is likely to break down due to natural wear and tear should be considered for appliance protection to save up on the cost of replacing it.
- Nature of the protection plan.
Read the plan carefully, know what repairs the plan offers, and what appliance the terms and conditions limit its coverage.
- Cashback reward.
Some plans offer cashback when the insured appliance is not damaged. This plan would be exciting given the owner stands nothing to lose.
- Affordability of the plan.
The owner is advised to choose a plan most affordable and budget-friendly to him/ her to avoid defaulting on payment.
- The complexity of getting a favorable plan and ease of claiming the plan.
A good plan should be easy to obtain and even easier to claim, with minimum repair time or refund period.
The availability of skilled and licensed technicians working on an appliance is an added advantage as the owner is assured of getting top-notch services.
Top appliance insurance companies.
- American Home Shield. Offers plans worth $70 per month for appliances, $80 per month plan, and $75 plan per month for a customized policy.
- Select home warranty. Has a platinum policy of $42 per month, bronze plan with monthly $36 payments
- Choice home warranty. Offer plans from $40 to $45 per month.
- First American home warranty. Have plans ranging from $36- $38 per monthly.
Procedure for getting an appliance protection plan.
- Research and compare various appliance protection plans, their services, cost. Request quotations from top firms to compare their plans.
- Pick the best plan regarding terms and conditions, cost of the plan, the coverage provided, limitations of the plan, appliances you want to insure, and risk of your appliance malfunctioning.
- Purchase a favorable plan.
How to claim the insurance?
The policyholder (owner of the appliance) calls the insurance company when an appliance is broken or stops working. In some cases, the owner is required to file an insurance claim form. The company calls the provider to let them know. The provider, in turn, calls the owner to schedule a visit to repair the appliance. The provider then fixes or replaces the appliance, and the owner pays a trade fee between $75 to $100. The owner can negotiate the trade fee during the policy acquisition period. Sometimes, an appliance plan provider can deny an insurance claim. In these instances, it is advisable to call a real estate agent who can obtain a resolution.
Advantages of an appliance protection plan
- One plan covers many appliances making tracking of appliance warranty less tedious and easy to claim.
- A new appliance is issued when the provider cannot fix the broken one.
- Plans offer flexibility. One can choose the level of protection they desire depending on their needs.
- The plan is a money-saving endeavor. If the appliance breaks down, the insurer must provide repairs or issue a new appliance; if not, some insurers have a cashback reward when the policy is not reclaimed.
- Transferable coverage in case the owner moves, the policy can be transferred.
- Ease of claiming the insurance. Most companies have online platforms where a policyholder signs in and fills a claim form quickly.
- The original contract may fail to cover limitations and exclusions.
- Most plans do not affect purchase; they have a waiting time window in which the appliance is not covered.
- The plans do not cover pre-existing damages that show up during appliance inspection.
- Most companies offer repairs more than replacements.
Breakdowns are inevitable since all machines have a fixed life span. Appliance protection plans offer protection against unforeseen costs associated with repairing home appliances. Having discussed the pros and cons of obtaining an appliance protection plan exhaustively, the factors to consider are strongly advised to obtain a cover for high price appliances or those prone to breakdowns. An old laundry machine, for instance, is best insured to avoid the high cost of replacing it.