If you read our blog post on Water Backup of Sewer and Drains, you know that coverage can be added to your homeowner’s policy to cover the cleanup and replace personal property damaged by water if your sump pump fails. However, did you know that damage to the sump pump itself is not covered in many cases? Most homeowners policies do not provide coverage for mechanical breakdown of household appliances. However, this coverage can be added onto your homeowners policy in the form of an endorsement. Some companies call this coverage Mechanical Breakdown and some call it Equipment Breakdown. For the purpose of this blog we’ll refer to it as Mechanical Breakdown Coverage.
Before we go into the coverage specifics, we need to look at a couple of definitions on a typical homeowner’s policy:
1. “Mechanical Breakdown” means direct loss to a “household appliance” located on the residence premises caused by, resulting from, or consisting of:
a. Failure of pressure or vacuum equipment;
b. Mechanical failure;
c. Electrical failure, including arcing; or
d. Rupture, bursting, bulging, implosion or steam explosion.
2. “Household appliance” means equipment or appliances usual to the occupancy, maintenance, or use of a dwelling that generate, transmit, or utilize energy to operate, including, but not limited to the following:
a. Central air conditioning systems;
b. Central vacuum systems;
c. Chairlifts and elevators;
d. Electric vehicle charging stations;
e. Heating systems, including water heaters;
f. Home automation and security systems;
g. Saunas, hot tubs and therapeutic baths;
h. Swimming pool pumps and filtration systems;
i. Stoves, wall ovens and refrigerators; and
j. Well water pumps and sump pumps.
Basically, anything that is attached to your home, is needed for the home to operate, and uses energy is considered a household appliance. The dollar signs are adding up in my head right now! Typically, Mechanical Breakdown Coverage provides anywhere from $10,000 – $50,000 depending on the company and endorsement itself.
Let’s say your sump pump is struck by lightning, causing it to fail. If you have water backup coverage you’d be covered up to the limit listed on the policy for cleanup and replacement of your personal property damaged by the water. Mechanical Breakdown coverage would replace the sump pump itself. The Mechanical breakdown endorsement covers a wide range of appliances that are needed for the home to operate. That’s why it’s so important to have this coverage on your homeowner’s policy.
What’s Not Covered
If your hot water heater needs to be replaced because it’s getting old, it’s not going to be covered here. Mechanical Breakdown Coverage does NOT cover general wear and tear of your appliances. The general upkeep of your home and appliances is your responsibility. Insurance is there to make you whole from an unexpected loss. There are some other exclusions that aren’t listed in this article, so please contact one of our experienced agents to go over the details with you.
Another great benefit of this coverage is that most companies will also replace your old appliances with “Green” or Energy Star rated appliances. That means in the event of a covered loss, you will probably be getting a much more energy efficient appliance than the one you had before. This not only helps the environment, but also saves you money in the long run too. Obviously, this is not the case in every scenario and also depends on the appliances you currently have. However, this is great news for a lot of people as energy efficient appliances will only get better as technology advances.
On the flip side, each new model brings new technology and features, causing the cost of repair and replacement of newer appliances to rise. Older appliances are inherently more susceptible to breaking down, whether it’s due to a power surge, mechanical failure, or loss of pressure. Mechanical Breakdown Coverage can save you thousands of dollars needed to repair or replace an appliance in the event of a covered loss. The endorsement is extremely inexpensive and covers a wide range of appliances needed to operate your home. Plus, it acts as the “other half” of your water-backup coverage, providing coverage for the sump pump itself. For more information on this endorsement or any other questions regarding your insurance policy, please call one of our amazing agents at 1-800-644-6030, message us on Facebook, or contact us through our website here.