Are Electrical Issues Covered by a Home Warranty?
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While YouTube tutorials can help you out of a lot of home project jams, there are certain things you just can’t DIY. Most electrical issues, for instance, should be handled by a professional to ensure that they are resolved correctly and safely.
This can be costly for homeowners. According to Angi, a platform that connects users with home repair pros, it can cost around $1,150 to have someone replace your circuit breaker box, and between $500 and $1,000 to replace an electrical meter riser.
Home warranty plans that cover electrical systems may help you affordably access professional work when you need it. Expect considerable variety in what these plans offer and how they’re priced, as well as their reputation with consumers.
Before committing to any contract, examine what it offers and read customer reviews of the warranty company from trusted sources like the Better Business Bureau. You can also review your homeowners insurance policy to see if a coverage extension through an endorsement would be a better solution, or even start a savings account specifically for home repair emergencies.
Coverage will vary by provider, so you’ll want to compare plans from different companies to find one that best suits your needs. For example, American Home Shield — a warranty company that operates in 49 states — offers three products that cover major electrical components like direct current wiring and exhaust, vent and attic fans. According to another major provider, Cinch Home Services, components typically covered by standard home warranties may include:
Electrical appliances (such as an electric water heater).
Electrical components of your appliances.
However, the nature of home warranties means that no plan will cover electrical issues under all circumstances.
Home warranties provide coverage for parts and systems when they break due to normal wear and tear. This means that if the electrical issue was deemed to be the result of human error or inadequate maintenance, it’s unlikely that the problem will be covered.
The National Home Service Contract Association, a trade organization, notes that contracts also do not cover conditions that existed before the purchase of the contract or electrical failures caused by improper installation or modification. Depending on your plan, issues with circuit overload, faceplates, and wiring related to computers, audio/visual equipment and security systems may not be covered.
» MORE: Are home warranties worth it?
Home warranties typically cost a few hundred dollars a year. Depending on the plan and the extent of its coverage, you could be spending anywhere from $300 to over $1,000 annually.
Additionally, you’ll have to pay a service fee to have a professional come out and assess the issue. This usually costs between $55 and $150 per visit. Regardless of whether the company ultimately approves or denies your claim, you’ll be on the hook for this fee.
More expansive coverage options will come with greater costs. Choice Home Warranty's Basic Plan, for example, doesn’t cover the air conditioning system, washer, dryer or refrigerator — customers will have to upgrade to the Total Plan for that.
Alternatives to home warranties for protecting your electrical systems
A home warranty is not your only resource for protecting your appliances and system from electrical failures. Depending on your homeowners insurance policy, you may be able to extend its reach through equipment breakdown coverage. This endorsement covers both electrical and mechanical failures, and may be cheaper than a home warranty.
Equipment breakdown coverage can also address additional losses that result from electrical issues apart from the appliance or system itself. For instance, Travelers reimburses customers with equipment breakdown coverage for the cost of food that spoils after a refrigerator fails.
However, homeowners insurance is unlikely to cover electrical issues that result from aging parts and systems. While home warranties cover only wear-and-tear-related issues, wear and tear is an exclusion for equipment breakdown coverage. If you are deciding between the two, consider the state of your electrical equipment and systems and how you may benefit from protective coverage.
There is no universal right or wrong decision. Parts will age over time, and a home warranty may cover some expenses when they need to be repaired or replaced. If you face a sudden electrical failure, certain insurance coverage could help pay for the damage. Of course, you can also take the cash that would have gone toward paying annual warranty or insurance endorsement fees and instead start an emergency fund for home repairs. No matter what you decide is right for your household, the important thing is to have a plan for how to pay for repairs when you need them.