Equipment Breakdown Coverage for DIC Policies

What does equipment breakdown cover?
It covers the perils of mechanical, electrical and pressure systems breakdown, none of which are named perils in a California FAIR Plan policy.

What are some examples of covered property?
Examples of covered property are items in a home that can break mechanically or electrically; for example, smart home devices, wine cooling unit, heat pumps, swimming pool equipment, air conditioning systems, electrical panels, televisions and media equipment, as well as other household appliances.

What is the benefit of adding Equipment Breakdown coverage to my DIC policy?
The typical California FAIR Plan or equivalent policy does not cover loss due to the perils of mechanical, electrical or pressure systems breakdown. By maintaining Equipment Breakdown Coverage in your Aegis DIC policy, loss caused by, resulting from, or consisting of one of these perils will be covered. This protects items such as your smart home network, security systems, appliances, air conditioning, swimming pool equipment and many other items throughout your home.

Can damaged equipment be replaced with more efficient equipment?
Yes, the Equipment Breakdown endorsement will pay up to 150% for replacement of equipment with newer items that are more energy efficient and better for the environment.

How does this coverage differ from a home warranty?
A home warranty is expensive.  It may also restrict certain equipment or include it at an additional cost.  By adding the Equipment Breakdown endorsement to your DIC policy, coverage applies to all real and personal property in your home.

What happens if multiple pieces of (real and personal) property breakdown at the same time?
Multiple pieces of equipment damaged by a single event would be considered one occurrence and subject to one deductible.

What is the difference between wear and tear and mechanical breakdown?
A mechanical breakdown usually occurs suddenly.  Wear and tear usually occurs over time.  In instances where wear and tear occurs, performance of the equipment slowly declines and its capacity diminishes; however, the equipment continues to operate but does not perform as expected.  Therefore, because coverage for wear and tear is excluded in the DIC policy and no equipment breakdown has occurred, there would also be no coverage provided by the Equipment Breakdown endorsement.

  • During a family vacation, a storm caused a power outage. A laptop computer and cell phone were charging when the outage occurred. When power was restored, a voltage spike damaged the items beyond repair and required their replacement. With the Off-Premises Coverage the homeowner would now be covered! Cost of Repairs: $3,750
  • A smart home used to control multiple systems (HVAC, lighting and irrigation) within the home sustained electrical damage from a power surge. Replacement of the computer and the unique programming was required. Property Damage: $2,975
  • An insured’s air conditioning system experienced an electrical short causing loss of cooling to the home. The air conditioning compressor needed to be replaced. Amount of Loss: $3,295
  • The circuit card in a freezer arced. Due to the age and availability of a circuit card, the whole unit had to be replaced. The cost to replace the unit was $9,259. The Equipment Breakdown endorsement also extended additional coverage for food spoilage. Amount of Loss: $11,345
  • An insured’s property was hit with an artificially generated power surge. The boiler and water heater controls, security system and media equipment were all damaged. Amount of Loss: $18,341

Aegis General is pleased to offer an alternative to home warranty plans. Equipment Breakdown coverage is now available through your Aegis DIC Insurance Policy. Whether you are a renter or a high-value homeowner, we have your equipment breakdown exposures covered.

If it uses electric power, it is most likely subject to equipment breakdown. Often this equipment requires sophisticated diagnostic tools and skilled technicians to oversee a potential repair. Equipment Breakdown coverage protects you against unexpected repair or replacement costs due to an electrical, mechanical or pressure systems breakdown. Best of all, this additional coverage follows the terms and conditions of your insurance policy. Off-premises coverage is now included. Coverage was previously limited to “Residence Premise” and now we’ve extended coverage for property that is away from the described premises.