Equipment Breakdown Coverage
Equipment Breakdown Coverage (EBC) is an endorsement that you can purchase to complement and enhance your homeowners or renters insurance.
What is Equipment Breakdown Coverage (EBC)?
With a standard policy, your stuff is covered from a set of named perils—things like fires, windstorms, or vandalism—but generally isn’t protected against damage caused by or resulting from electrical failure or mechanical breakdown. Adding EBC can help protect most of the electronics and appliances in your home.
What sort of electronics and appliances are covered?
EBC covers your 85-inch television, as well as things like your dishwasher, washing machine, refrigerator, dryer, AC system, home gym set-up, air tanks, central vacuum systems, computer, security system, sump pumps… even the climate control for your wine cellar, if you have one (how posh). And if your solar panels stop working due to a breakdown, EBC may provide coverage for replacement.
So, if there’s a mechanical or electrical breakdown, EBC may provide up to $100,000 in coverage on almost any home appliance. (One rule of thumb to keep in mind: For EBC to kick in, your item needs to have some direct physical damage that requires repair or replacement.) As with your underlying policy, a deductible will apply to every claim.
Another nice little perk; if your fridge or freezer is damaged as a result of a breakdown and all your food spoils, EBC can provide up to $10,000 in coverage. That’s a whole lot of microwavable pizzas!
What’s the difference between EBC and a home warranty?
A home warranty is a stand-alone product which covers appliances from wear and tear, but not accidental damage, whereas EBC only covers a ‘fortuitous event’ that causes physical damage (and does not cover wear and tear). Put it this way, if your phone screen cracks or you spill coffee on your computer and there’s a breakdown, you’d be covered – with a home warranty you wouldn’t.
But don’t my appliances come with a warranty of their own?
They sure do! But if you read the small print, most warranties are only valid if the machine or appliance malfunctions, or if there’s a technical problem. If there’s a sudden power outage causing your 10-year-old AC to breakdown,—you can’t rely on your warranty. However, you may have coverage under EBC.
What does EBC not cover?
If your equipment stops working because it’s been badly maintained, it won’t be covered. That’s because EBC may not cover damage caused by general wear and tear. Wear and tear generally takes place over a long period of time. Damage including erosion, rusting, or leaking may not be covered… so don’t forget to keep up with maintenance.
How much does EBC cost?
If you’re adding EBC to your renters policy with Lemonade you’ll pay around $2/month extra on your policy (approx $24/year) and with homeowners or condo insurance you’ll pay around $3/month ($36/year). Lemonade will be rolling out EBC in the next couple of months in some (but not all) states, so watch this space.
Why might you need it?
If your appliances are damaged during a fire or windstorm, your homeowners insurance policy might cover the cost of replacing them. However, it’s unlikely that your homeowners policy provides coverage if your appliances break because of an electronic or mechanical failure. There’s where EBC comes in — if you’ve added this endorsement to your policy, you may have coverage up to $100,000 – and for a cost of as low as $36 dollars per year, that’s a pretty good deal.
What about a deductible?
Your deductible, aka the amount deducted from your future claims, is a fixed $500—applied to every EBC claim.