Mechanical breakdown
A working part suddenly breaks, jams, or fails inside the machine.
Quick answer:
A covered breakdown is sudden physical damage that begins inside covered equipment. Normal aging, poor condition, fire, lightning, flood, and other listed causes do not count as “equipment breakdown” under this endorsement.
What the words mean
A breakdown can happen in three main ways.
The endorsement covers direct physical loss to covered property when it is caused by one of these breakdowns.
Electrical or electronic breakdown
An electrical part, motor, or electronic control suddenly fails.
Pressure-system breakdown
A covered boiler, vessel, or pressure system ruptures, bursts, bulges, implodes, or has a steam explosion.
Easy examples
These losses may fit.
Each example starts with a sudden problem inside the equipment. A real claim still depends on the property involved and all policy terms.
May fit
The heat-pump compressor suddenly fails.
The compressor or electric motor has direct physical damage. It was working, then a sudden internal breakdown stopped it.
Why it may fit: A sudden mechanical or electrical breakdown began inside covered equipment.
May fit
The refrigerator compressor breaks.
The refrigerator suddenly stops cooling after an internal compressor breakdown. Covered food in the refrigerator or freezer spoils.
Why it may fit: The equipment damage may qualify, and refrigerated-property coverage may pay up to $10,000 for covered spoiled food.
May fit
A boiler pressure fitting suddenly bulges or ruptures.
Pressure inside covered boiler equipment causes a sudden bulge, rupture, or steam-related failure.
Why it may fit: Rupture, bursting, bulging, implosion, and steam explosion are named breakdown types.
May fit
A clean electronic control board suddenly fails.
A control board inside covered home equipment has sudden physical electronic damage and stops the machine from working.
Why it may fit: Electrical and electronic breakdown are included in the endorsement’s definition.
Important: “May fit” does not promise payment. The equipment must be covered property, the damage must meet the endorsement’s definition, and no exclusion can take coverage away.
What does not count
These are not equipment breakdown.
The endorsement lists these causes as something other than an equipment breakdown.
A motor wears out over time.
Wear and tear is not a breakdown under this endorsement.
Rust or corrosion eats through a part.
Rust, corrosion, decay, deterioration, latent defect, and mold are listed as not equipment breakdown.
A rodent chews the wiring.
Nesting, infestation, and animal waste are listed as not equipment breakdown.
Software or data will not process correctly.
A computer or electronic-data processing problem, without covered physical breakdown, is not equipment breakdown.
Lightning or fire damages the unit.
Fire, lightning, and combustion explosion are specifically outside this equipment-breakdown endorsement.
Flood, freezing, wind, or hail damages it.
Those outside causes—and several other named causes—are not equipment breakdown.
Also listed as not equipment breakdown: smog; settling, cracking, shrinking, or expansion; and scratching or marring.
There is one important “resulting damage” rule. If wear, rust, settling, animals, or another condition in this group leads to different physical damage that is not otherwise excluded, that resulting damage may still be considered. This does not make the original worn, rusty, or damaged part covered.
What kind of equipment?
Think of equipment with moving parts, electricity, electronics, or pressure.
These are simple examples of the types named in the endorsement. The item must also be covered property under the homeowners policy.
Heating and cooling
Heat pumps, air handlers, compressors, motors, and electronic controls.
Refrigerators and freezers
Compressors, motors, and control systems in covered appliances.
Boilers and pressure equipment
Covered boilers, vessels, and connected pressure systems described by the endorsement.
Electrical equipment
Covered motors, wiring components, and electrical systems inside equipment.
Electronic and fiber-optic
Covered control boards, sensors, electronics, and fiber-optic equipment.
Mechanical equipment
Covered machines and parts that move, turn, pump, or compress.
Four helpful extras
Up to $10,000 for each of these needs.
Each coverage below has its own $10,000 limit. These amounts are part of—not added on top of—the $100,000 equipment-breakdown limit.
Faster repairs
Temporary repairs plus overtime or express transportation needed to speed up a permanent repair or replacement.
Spoiled refrigerated property
Covered property that spoils because a covered breakdown cuts off power, light, heat, steam, or refrigeration.
Pollutant cleanup
Covered cost to clean up or remove pollutants caused by a covered equipment breakdown.
Equipment away from home
Covered property temporarily away from the listed location. Motorized vehicles are not included.
Picture one bucket: The main bucket holds up to $100,000. Each extra coverage can use no more than $10,000 from that same bucket.
How the money works
The first $500 is your deductible.
The endorsement pays covered loss above the deductible, up to the applicable limit.
Simple example: $8,000 covered loss
If a covered breakdown causes $8,000 of covered damage, the $500 deductible is taken first.
- One deductible applies at each covered location.
- The deductible applies across all coverages in this endorsement.
- The most paid for one equipment-breakdown loss is $100,000.
Covered damage$8,000
Your deductible− $500
Amount above deductible*$7,500
*This is a teaching example, not a claim decision. Depreciation, replacement-cost conditions, other insurance, policy limits, and exclusions can change the amount paid.
Repair and replacement
What happens when equipment must be fixed or replaced?
The endorsement explains ordinary replacement cost plus limited help for safer, more efficient, or greener equipment.
Basic replacement cost
Payment is the smallest of the cost to replace without depreciation, the cost to repair, or what is actually spent.
Safer or more efficient
If replacement is needed, extra cost for equipment that is better for the environment, safer, or more efficient may be included—up to 150% of like-kind cost.
Green improvements
Reasonable green repair, certification, professional fees, recycling, and certain extra living or lost-rent time may be included, subject to the endorsement.
| The 150% rule | The total for an improved or green replacement cannot be more than 150% of the cost to replace with equipment of the same kind and quality. |
|---|---|
| Still inside the limit | These improvement costs do not increase the $100,000 limit or a $10,000 sublimit. |
| Actual-cash-value property | The safer, more efficient, and green improvement provisions do not apply when the property is settled at actual cash value. |
Important boundaries
Damage from these causes is not covered by this endorsement.
This list uses the endorsement’s named causes in shorter, everyday language.
- Fire or lightning
- Combustion explosion
- Wind or hail
- Weight of snow, ice, or sleet
- Freezing
- Falling objects
- Smoke
- Aircraft or vehicles
- Riot or civil commotion
- Vandalism
- Collapse
- Sinkhole collapse
- Theft
- Volcanic action
- Fire-extinguisher leakage
- Water or water damage
- Earth movement
- Flood
This does not always mean your whole homeowners policy says “no.” A different part of the policy may address fire, lightning, wind, theft, or another cause. It only means those causes are not equipment breakdown under this endorsement.
Read the source
NC Grange Equipment Breakdown Endorsement
Form HO 0076 02-18 · 4 pages. The endorsement and your policy control if any summary on this page differs.