In my county in Texas a malfunctioning septic system is a criminal offense with big fines and potential jail time if ignored. 

The seller did not disclose this malfunctioning plumbing or this was disclosed on the inspection report.

We initially thought that someone in our office tripped over a power cord, but it seems the Flux Capacitor has a malfunctioning Jigawat Converter.

My agent told me it was due to a sump pump malfunction and the seller replaced it with 2 pumps. 

Tenant agrees to allow Landlord timely access to premises to do maintenance and repair.Tenant will notify Landlord in a timely manner of any damages or problems as they arise, including damages caused by Tenant, malfunction of appliances or fixtures, and water/moisture leaks and spots.Tenant will take care of the premises, keeping them clean and clear of debris.

In this section I provide my name and number (I manage all 5 SF rentals myself, remember) along with a statement which reads "Tenant will pay Landlord the first $250.00 of the cost to repair each conditiono in need of repair, and Landlord will pay the remainder, except for the following conditiosn which will be paid as follows:..." and then it goes on to discuss 4 conditions which are "Landlord negligence", "wastewater stoppages caused by roots/malfunctioning equipment", "health/safety issue not caused by Tenant or guest of Tenant", and "heating/AC, water heaters, water penetration".

So now we have ice maker malfunctions causing the chef to buy ice again AND plumbing leaks.  

does property insurance cover damages or malfunctions to appliances, or do you stick with each appliances manufacturer's warranty (if it's new enough to have one?)

It's an electrical malfunction and told the landlord on the day is stopped working. 

Basically, your product was defective by the time you picked it up off the shelf and brought it to the counter, and you told the potential buyer that it was their responsibility to fix it even though it malfunctioned before they even purchased said product."