Two ways to protect the equipment in your home – Home Warranties and Mechanical Breakdown coverage

By Kurt Thoennessen, CAPI

There are many differences between home warranties and mechanical breakdown coverage. There are also several different providers of these coverages, each with their own contracts and coverages. The below comparison is based on a review of several home warranty and mechanical breakdown contracts. Please use this chart as a general guide in your decision-making process when considering the purchase of either one of these products.

The chart below provides a quick overview of home warranties and mechanical breakdown coverage. For more details, please contact Kurt Thoennessen at 203-405-2645 or

Home Warranty (Consolidated Findings) Mechanical Breakdown Policy (Consolidated Findings)

Covered Items:


Items specifically listed


Items specifically listed. Also items that generate, transmit or utilize mechanical or electrical power included


What it covers:


Repair or replacement of systems that become inoperative due to normal wear and tear, subject to terms and conditions such as: no coverage for failure due to lack of capacity, misuse, and electrical failure or surge


Accident – This means a sudden and accidental breakdown of the “object” or a part of the “object.” At the time the breakdown occurs, it must manifest itself by physical damage to the “object” that necessitates repair or replacement


What it doesn’t cover:


Systems not listed as covered in the contract, specific components of systems as indicated in the form, incidental loss such as food spoilage, additional living expenses, and code upgrades


Wear and tear, deterioration, depletion, corrosion or erosion, breakdown of any electronic computer or electronic data processing equipment, etc.


Coverage limits:


As specifically stated per system in the contract, typically $1,500-$5,000, as an annual aggregate


$50,000 to $500,000 depending on insurer


Liability for damage to property in your care:


Not Included




Choice of service provider:


Service provider is dictated by the home warranty company.


Your choice of service provider


Repair or replacement of damaged item:


 This is the home warranty   company’s decision.


The insurer will repair or replace an object with one of like kind, capacity, size and quality and used for the same purpose


Matching brand color and dimensions:


This is done at the home warranty company’s discretion or not included.


The insurer will repair or replace an object with one of like kind, capacity, size and quality and used for the same purpose


Cost to diagnose the problem:


Not included


Covered above the deductible (typically $500-$1000)


Home size guidelines:


Special terms and pricing for homes larger than 5000 ft.²


Not applicable




$300 -$1,200 per year


$35 – $500 per year


Kurt Thoennessen

Kurt is a Senior Advisor with Ericson Insurance Advisors and a Certified Advisor of Personal Insurance (CAPI). He works with high net worth individuals and families to design and implement risk management and insurance programs.