Equipment Breakdown

Equipment breakdown is an endorsement on a homeowners policy that covers physical damage from sudden and accidental mechanical or electrical failure of major home systems. This is distinct from damage caused by external perils (which a standard policy covers) and from normal wear and aging (which no policy covers).

What it covers: HVAC system failure, water heater rupture or motor burnout, electrical panel arcing damage, well pump failure, home generator failure, sump pump failure, large home appliances (refrigerator, washer, dryer), pool equipment, and increasingly home solar inverter failure. The coverage pays to repair or replace the failed component plus any consequential damage from the failure (such as food spoilage from a refrigerator failure, or water damage from a water heater rupture).

Why this matters: standard homeowners policies exclude mechanical breakdown explicitly. So when your AC compressor seizes in July and needs a 6,000 dollar replacement, the regular policy does not respond. Most homeowners do not realize this until they call the claims line. Equipment breakdown endorsement closes that gap.

What it does not cover: gradual deterioration, lack of maintenance, manufacturer recalls (handled by warranty), or systems that have aged out of their useful life. Carriers typically exclude items more than 25 to 30 years old.

Cost: typically 25 to 75 dollars per year for 50,000 to 100,000 dollars of coverage, with a separate deductible (often 250 to 500 dollars) lower than the standard policy deductible. Most major Georgia carriers (The Hartford, Travelers, Nationwide, Safeco) offer equipment breakdown as an option. Worth considering for homes with older systems, all-electric homes, homes with home offices or refrigerated medical equipment, and homes with well or septic systems.