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equipment-breakdownEquipment Breakdown is an additional endorsement that can be added to the standard homeowner policy. Many carriers now offer this endorsement to be added to a homeowner policy for an additional premium. It is relatively inexpensive to add and generally costs $25-$50 a year to add. So let’s “break it down” and find out what it covers.
Q: What does Equipment Breakdown Cover?
A: Equipment Breakdown coverage protects you again unexpected repair or replacement costs due to mechanical, electrical or pressurized system breakdown.
Q: What kind of appliances are subject to Equipment Breakdown?
A: Anything in your home that can break mechanically or electrically, for example, heat pumps, swimming pool equipment, air conditioning systems, electric panels, televisions & media equipment, dishwashers, water heaters, sump pumps, as well as other household appliances.
Q: What kinds of losses are covered by Equipment Breakdown that may not be covered by a standard home policy?

  1. A Furnace heat exchanger cracked and the furnace needed to be replaced.

Amount of Loss: $9,086

  1. An insured’s air conditioning system experiences an electrical short causing loss of cooling to the home. The air conditioning compressor needed to be replaced.

Amount of loss: $3,295

  1. The circuit board in a subzero freezer arced. Due to the age and the availability of the circuit card, the whole unit had to be replaced. The cost to replace the unit was $9,259. Additional coverage for food spoilage was also paid.

Amount of Loss: $11,345
Q: Are Other Structures (I.E. Pool house, garage, shed) covered property?
A: Yes. The equipment breakdown coverage follows all covered property as defined in the policy.
Q: How does this coverage differ from a home warranty?
A: A home warranty is expensive. It may also restrict certain equipment or include it at an additional cost. By adding the equipment breakdown endorsement to your homeowners’ policy, coverage applies to all real and personal property in your home.
Q: Can damaged equipment be replaced with more efficient equipment?
A: Yes, the equipment breakdown endorsement will pay up to 125% for repair or replacement of equipment that is more efficient and better for the environment. This amount may vary from carrier to carrier. However, the majority of carriers will pay an additional expense to upgrade to “Green” appliances.
Q: If a piece of equipment fails due to age, is it covered?
A: Age does not exclude covered equipment. However, if caused by wear and tear the item would not be covered.
Q: What is the difference between wear and tear and mechanical breakdown?
A: A mechanical breakdown usually occurs suddenly. Wear and tear usually occurs over time. In instances where wear and tear occurs, performance of the equipment slowly declines and its capacity diminishes: however, the equipment continues to operate but does not perform as expected.

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