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What does homeowners and renters insurance cover?

Picture this — you’re in the market for a new appliance. After some research, you’ve got your eyes set on a beautiful new refrigerator. You saved for a few months, but wait until a holiday sale comes around (like President’s Day or Labor Day, when retailers typically mark down big-ticket items) to get the best deal. Your shiny new fridge is a standout in your kitchen — a stainless steel finish, tons of storage space, and...

Wait — where's that leak coming from?

Usually with most major purchases like appliances and electronics, your purchase may come with a warranty, which is usually “free” or covered in the price of your item. You might also have the option to purchase an additional, time-specific warranty for an extra layer of protection. But if your warranty expired and you don’t have additional protection, the cost of sudden accidents, damages, and malfunctions could fall on you — and it can get expensive.

Appliances are some of the most expensive household items you’ll ever buy. Brand new refrigerators regularly cost well over $800 (fancier ones will run you more than $1,000!) and ovens are just as expensive. Washers and dryers are about the same. New dishwashers are expensive too — and who wants to live without one of those these days?

Consider these facts:

  • 50 million+ appliances stop working every year.

  • You can expect to spend at least $1,000 to replace any given appliance.

  • Appliance repairs can cost at least $500.

 

That’s not fun for your budget — especially if you’re not prepared for it. Plus, it’s little consolation that these items are used often in daily life and considered by most to be necessary. The real pickle with appliances is that because they are used so frequently, they’re more likely to wear out and need replacement.

But you can avoid the high cost of replacing those items by protecting the items you have with a personal property protection plan — because these repairs aren’t usually covered in your homeowners or renters insurance.

Yes, a common misconception is that your homeowners insurance or renters insurance plan extends to your belongings. They do, but with many exceptions and limitations. Let’s break those down — and learn what you can do to cover your belongings for almost any situation — next.

 

What is homeowners insurance and what does it cover?

Homeowners insurance provides protection for your home and assets from things like:

  • Fire

  • Lightning strike

  • Smoke

  • Wind

  • Hail

  • Falling objects

  • Explosion

  • Riot

  • Falling aircraft

  • Crashing car

  • Vandalism

  • Theft

  • Volcanic eruption

  • Weight of ice, snow, or sleet

  • Water, steam, or frozen plumbing

  • Electrical current

 

A basic policy (which is usually required by most lenders before you take out a mortgage) includes six coverage provisions, which are the sections that lay out exactly what you are getting covered, and for how much. These provisions include:

  • Dwelling coverage: this covers the cost of repairing or rebuilding your home from fire, hurricane, or other disaster listed in your policy. Your home’s foundation (think: roof, walls, plumbing, etc.) is covered.

  • Other structures coverage: this covers the rebuilding process of structures separate from your home like a detached garage, fence, or shed.

  • Personal property coverage: this includes personal belongings in your home — but only for a few specific reasons. (We’ll get to that in a bit.) If someone breaks into your home and steals your valuables, for example, the cost of replacement is covered.

  • Additional living expenses: this covers any increase in living expenses if your house is damaged and you need to live somewhere else while it’s being rebuilt or repaired.

  • Personal liability coverage: this includes medical bills, lost wages, or other costs for people you’re legally responsible for injuring. For example, if your guest slipped and fell at a dinner party on your property and they required serious medical attention, you would be liable for these costs.

  • Medical payments coverage: similar to personal liability coverage, this pays out if a guest in your home incurs a minor injury, no matter who is at fault.

  • Additional coverage: this coverage can be customized — you can add on protections from water backup or equipment breakdowns, to name a few.

 

What is renters insurance and what does it cover?

Similar to homeowners insurance, a renters insurance policy is designed for renters living in a house or apartment. There are three types of coverage that protect you from certain situations that you cannot prevent — these are called “perils.” Perils are situations like a break-in, theft, or a visitor’s injury, nearly identical to what is covered in a homeowners policy. The types of coverages are:

  • Personal property coverage: this covers the cost to repair or replace your belongings up to your coverage limit if it is unexpectedly destroyed or damaged by a covered peril.

  • Liability coverage: if you accidentally damage someone else’s property, or if you invite in a clumsy guest and they wind up with a medical bill, this portion of your coverage will kick in.

  • Additional living expenses coverage: these are additional costs you might have to take on (like a hotel, for example) if your house or apartment is deemed uninhabitable from damage or another event beyond your control.

 

If you’re currently renting, it’s a good idea to have this kind of coverage, even if your landlord doesn’t require it. Your landlord will have their own policy to protect the building you live in, but it won’t extend to your personal property. And while you’re usually off the hook if you need an appliance repaired or another big fix (depending on what happened), your personal belongings have no protection without a renters insurance policy.

 

Does your homeowners or renters insurance cover the cost of repairing appliances?

The answer to that question is “it depends.” Appliances can be covered if they’re in your home or an outside structure on your property like a garage, tool shed, or gazebo. But to truly determine your coverage under homeowners or renters insurance, you’ll need to answer some questions: What kind of appliance do you have, and what happened to it?

Basically, if your appliance is relatively new (not considered well beyond its “normal” life span) and breaks prematurely, it could be covered by your homeowners or renters insurance. But again, it depends on your answers to the questions above.

However, if it’s an older appliance or pushed beyond regular use (like overloading a washer and dryer or not maintaining it properly), it is unlikely to be covered by your insurance.

Hopefully, your life doesn’t resemble a cartoon, and you are relatively safe from calamity like some of the situations listed above. It is more likely that you will need to replace appliances that are simply worn out. That, unfortunately, is not covered by your homeowners or renters insurance.

 

What kind of repairs are not covered by homeowners and renters insurance?

While it’s a good idea to have homeowners or renters insurance (depending on whether you bought or rent your home), there are some things that are simply not covered by insurance. These include:

  • Damage caused by a flood

  • Earthquake

  • Hurricane

  • Flood

  • Other natural disaster

  • Avoidable accidents (Oh, what children can do to an appliance!)

  • Cosmetic damage, like dents or scratches

 

Most importantly, your insurance won’t cover any damage or malfunction caused by the normal wear and tear of using your appliances.

So how can you get your belongings covered for these instances? Rather than paying to repair or replace new appliances, it may be a good financial decision to look into supplemental insurance you can count on if you need to replace an expensive appliance for a reason not covered by your homeowners or renters insurance.

 

How can I protect my valuables with property protection?

Personal property protection plans, or asset protection plans, simply cover the valuable stuff you own, and can be a great additional layer for where your homeowners or renters insurance falls short. So it’s best to shop around for supplemental insurance that covers all your bases.

Kasasa Care™, for example, works in partnership with Cover Your Assets (CYA) to offer your valuables asset protection from instances like water damage, natural disasters, and device malfunctions. You can use asset protection for almost everything you own — any make and model, new or used. Some items you can cover include:

  • Major appliances – refrigerator, washer and dryer, oven

  • Indoor furniture, like your sofas, tables, dressers, and bed frames

  • Televisions and media stands

  • Exercise equipment

  • Patio and outdoor furniture

  • Smartphones

  • Video game systems, including console and controllers

  • Small electronics

  • Cameras and specialty lenses

  • Drones

  • Computers and laptops

 

Check out some quick price estimates for an idea of how much you might be paying to protect your stuff:

  • Major appliances at $6.99 per month

  • Furniture at $3.99 per month

  • Televisions at $6.99 per month

  • Computers at $5.99 per month

  • Smartphones at $6.99 per month

  • Video game systems at $4.99 per month

  • Exercise equipment at $9.99 per month

  • Patio furniture at $4.99 per month

  • Drones at $8.99 per month

  • Nice cameras and specialty lenses at $6.99 each

 

Not too bad, right? A lot better than replacing those expensive items without insurance. And you can also bundle these plans with your electronic devices, including smartphones, tablets, and smartwatches, to save even more. The best part is, there are no long-term contracts — and you have the option to pay monthly or prepay for a year or longer. (We call that a win-win.) And, if you ever need to file a claim, the online process is simple and fast.

Protection plans are a great way to extend the life of some of the more expensive items you have, because you never know what could happen. Plus, it’s a great way to have all your bases covered in the event your homeowners or renters insurance falls short. Furniture swept up in a tornado or hauled away by a flood? Your laptop drank your venti latte? By protecting your valuables now, you’re saving yourself a lot of headaches (and money) later.

Tags: Protection, Care, Asset