Stay Cool: Benefits of Home Systems Protection Coverage
In today’s modern homes, we rely on numerous complex systems and appliances that make our lives comfortable and convenient. From heating and cooling systems to kitchen appliances and entertainment equipment, these technologies have become essential to our daily lives. But what happens when these systems unexpectedly break down?
The repair costs can be substantial, and standard home insurance policies typically don’t cover mechanical or electrical failures. This is where Home Systems Protection comes in.
$13,992
Average cost to repair electrical system failures in a typical home (Source: Wawanesa Mutual)
Table of Contents
What is Home Systems Protection?
Think of Home Systems Protection as a safety net for the hard-working technology that keeps your house running. Standard insurance usually covers damage from outside forces like fire or wind, but it often ignores the internal health of your appliances.
This coverage steps in when your essential equipment suffers a sudden mechanical or electrical failure. This applies to anything that uses power, generates energy, or operates under vacuum or pressure. It includes everything from a total electrical panel meltdown to electronic circuitry impairment. That phrase is just a fancy way of saying the tiny computer chips inside your high-end appliances have fried or failed.
Essentially, if it plugs in, heats your water, or pumps your air, and it breaks down unexpectedly, this is the protection that covers the repair or replacement costs.
Key Coverage Highlights (SGI CANADA)
- Limit of Liability: Up to $50,000 for loss arising from any one breakdown.
- Food Spoilage: Up to $5,000 for spoiled food in a refrigerator or freezer.
- Environmental Upgrades: Pays up to 150% of replacement cost to upgrade to more energy-efficient or safer equipment.
Benefits of Home Systems Protection
Peace of Mind
24/7 Protection
For your home’s most critical systems
Financial Security
Avoid Major Expenses
Protection from unexpected repair costs
Convenience
One Policy
Simplified claims process through your insurer
One of Home Systems Protection’s most significant benefits is its financial protection. Without this coverage, you could face thousands of dollars in repair or replacement costs if one of your systems breaks down. Extended warranties often offer inadequate safeguards, leaving you vulnerable to substantial losses for the appliances essential for heating, cooling, hot water, electricity, communication, and backup power.
To mitigate this risk, you may opt for Home Systems Protection, which can be added to your current home insurance policy. Some insurers offer you a discounted rate for the cost of adding this coverage if bundled with Service Line Coverage.
Below are some examples of what can go wrong with your home’s systems and equipment, and the cost of such losses (price estimates provided by Wawanesa Mutual).
Common Breakdowns & Typical Costs
- Regarding your electrical system, circuit breaker failures can lead to overheated wiring, outlets, and fried appliances. In a worst-case scenario involving a panel replacement and resulting damage, costs can be steep. Typical loss: $15,500.
- It is essential to monitor your air conditioning system. An overheated unit can lead to a burnt-out compressor, which often means replacing the entire outdoor unit. Typical loss: $6,200.
- Your furnace is critical during Saskatchewan winters. A cracked heat exchanger or a major blower motor failure can quickly result in a full system replacement. Typical loss: $6,800.
- Finally, modern built-in stoves rely heavily on complex control boards. If these electronics fail on a high-end model, the repair or replacement cost is substantial. Typical loss: $4,200.
$40-60
Annual Premium
Annual Cost
Potential Repair Costs
Home Systems Coverage Exclusions
Based on GENERAL policy terms, it is vital to know what is not covered under Home Systems Protection:
Standard Policy Exclusions
- Wear and Tear: Rust, corrosion, erosion, or gradual loss of efficiency.
- Maintenance Issues: Conditions corrected by resetting, recalibrating, or normal maintenance.
- External Perils: Damage caused by fire, lightning, windstorm, hail, or explosion (these are typically covered by your primary home policy).
- Earth & Water Movement: Earthquakes, landslides, floods, and sewer backups.
- Cyber Events: Malicious code, viruses, or unauthorized electronic access.
Learning from Losses: SGI CANADA Examples
The following real-world examples provided by SGI CANADA illustrate how specialized coverages protect homeowners from financial hardship during unexpected failures.
The Broken Air Conditioner
A homeowner faced a $3,750 repair bill in late June when their air conditioner stopped cooling due to metal fatigue in the refrigerant line.
The Result: Because they had Home Systems Protection, the repairs were covered before a major heat wave arrived.
The Collapsed Sewer Pipe
An old clay sewer pipe collapsed in a homeowner’s front yard, requiring expensive excavation and driveway repairs.
The Result: In this case, Service Line Coverage (a companion to HSP) provided the necessary funds for the repair.
Frequently Asked Questions
How is this different from a standard home warranty?
Unlike a separate warranty you might buy for a single fridge or oven, Home Systems Protection is built right into your home insurance. It covers a much wider range of equipment (like your furnace, electrical panel, and security systems) all in one place. It also helps with extra costs like food that spoils when a freezer breaks or “expediting expenses,” which is just insurance talk for paying more to get repairs done faster in an emergency.
Do I have to pay anything out of pocket for a claim?
Yes, you are responsible for a “deductible.” This is a set amount of money you agree to pay toward a repair before the insurance company covers the rest. You can find your specific amount on your Declaration Page (the summary sheet at the front of your insurance policy).
Does this cover old equipment or just new appliances?
It covers both, but the payout changes as things get older. If your equipment is less than 15 years old, the policy usually pays to fix it or replace it with a new one. Once it passes the 15-year mark, the policy pays the “Actual Cash Value.” This simply means the insurance company pays what the item was worth at the time it broke, taking into account its age and wear and tear, rather than the price of a brand-new model.
Disclaimer: The information provided in this article is intended as a general guide. Please consult your specific insurance policy for precise coverage details, including conditions, definitions, and exclusions that apply to your individual insurance.
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Last updated:
Posted in Home & Tenant on June 7, 2023 by Hope Prost
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