From heating systems to washing machines, homeowners depend on the security, comfort, and convenience of their home systems and equipment. Many people assume these systems are protected by warranties, service contracts or insurance—but the reality is they're often not.

When home systems break down, the costs to repair or replace even one of them can run well into the thousands. Insurance advisers should educate their customers about home systems protection coverage (HSP) and make it easy for them to purchase it.

HSP coverage is not new and is widely available through both large national carriers and smaller regional carriers. This affordable endorsement pays for repair or replacement of a wide range of appliances and equipment that may not be covered by standard home and condo insurance. Nationally, HO3 and HO6 endorsements can range anywhere from $20 to $100, averaging about $25 to $40.

What HSP Covers

The HSP endorsement protects your clients' in-home systems and equipment from mechanical breakdown and sudden and accidental loss. It typically covers anything that cannot be unplugged or moved, such as central air conditioning and heating systems, refrigerators, washers and dryers, and more. It won't cover the coffee maker, blender or toaster. Nor does it provide coverage for losses due to wear and tear, including rust, corrosion, erosion, and deterioration; or physical damage caused by an event such as a lightning strike or fire.

Paid losses include the systems themselves plus the cost of loss of use, expediting expenses, food spoilage, and pollutant clean up.

Here are just a few examples of typical losses paid to HSP policyholders:

1) Central air conditioning. An insured came home to find that the temperature inside her home was 86 degrees Fahrenheit. A repair company was called to investigate and discovered the compressor was electrically grounded and had to be replaced. The paid loss after the deducible was $1,744.

2) Induction cooktop. While preparing dinner, a homeowner discovered his induction cooktop would not turn on. A repair person discovered the cooktop had experienced a control device failure, which burned out all the heating elements. The entire cooktop had to be replaced. The paid loss after the deducible came out to $2,050.

3) Freezer. A homeowner returned from a week at the beach to discover their freezer chest had stopped working. The freezer's cooling coils experienced an electrical breakdown, and all contents were spoiled. Replacement coils were not available, and the freezer had to be replaced. The paid loss covered the freezer and the spoilage, and after the deducible it came to $4,950.

4) Furnace. A homeowner woke up and noticed his furnace wasn't working. The repair person found it was due to a failed blower motor. Replacement parts were not available, and the furnace had to be replaced. Due to extreme temperatures, the insured needed to stay two nights in a hotel. The paid loss covered the furnace and hotel expenses and after the deductible clocked in at $9,846.

How Homeowners Benefit

There are many reasons HSP coverage is important today. For starters, consumers own more home systems than ever before. The technology used to manufacture them is highly sensitive and has a limited lifespan. Further, extreme weather keeps home systems running overtime. And working from home means even more wear and tear.

With HSP, customers gain the peace of mind of affordable coverage far beyond a typical HO3 and HO6 policy. For agents, HSP reduces errors & omissions liability and helps avoid difficult conversations when customers are not covered.

Reach out proactively to inform customers about HSP coverage. Share claim examples to educate them about what HSP will and won't cover. Many agents even roll coverage onto their books of business with a customer opt-out option. Applying your knowledge and expertise in today's rapidly changing world can help reduce customer anxiety about the future and set you apart as a true trusted advisor.

Jim Hyatt is chief underwriter and executive vice president of Arbella Insurance Group.