Updated: May 20th, 2019
Ever wondered what is the difference between home warranty and homeowners insurance? Are they not the same? Let’s find answers to these questions.
While home warranty and home insurance products may come across as same, they are totally different. The coverage, cost, terms, and conditions vary greatly. Home insurance is compulsory in some cases whereas home warranty is a recommended choice.
Now that you have a fair idea of the difference between home warranty vs home insurance, let’s summarize.
A home warranty offers protection for your major appliances, as well as plumbing and electrical units. It covers the cost of repairing or replacing major household appliances in case they break down. This is provided they meet the terms and conditions of the home service contract.
Home insurance covers your home in the event of damage due to natural calamity or man-made disasters and offers you liability protection from lawsuits in case of third party involvement.
If your neighbor came visiting you and accidentally fell and got injured and decides to sue you, then home insurance will take care of the claims. Home insurance is mandatory if you have a mortgage on your home.
Items covered by a home warranty may vary by company and plan, but typically includes the following items:
In the case of an uncertain event like fire, theft, vandalism, or certain natural disasters, the cost of damages is covered. It also covers your personal items and gives you liability protection.
Liability insurance will protect you from lawsuits in the event that someone is injured on your property. Home insurance will only insure your personal items in case they are stolen or ruined in a disaster. Repairs and replacements due to wear and tear are not covered.
The insurance policy varies depending on your state of residence and type of policy, but generally, it will cover the following.
Home is the most prized and cherished possession any individual can have and nobody anticipates damages to this, therefore a home insurance provides you the following benefits when you cover your home.
A standard warranty runs $300 to $500 for a year of protection, which covers the cost of repairing or replacing a home’s major systems and appliances.
Home sellers typically pick up the tab for the first year of coverage. Extended coverage plans for pools, spas and washers and dryers can be purchased at an extra cost.
Insurance cost varies from state to state and depends on the extent of coverage and the location of the property. But a standard insurance can cost any homeowners insurance is between $300 and $1,000.
When you are planning to buy a home warranty, make sure that you do some research. Check our home warranty reviews section that provides pricing, comparison, quotes and consumer reviews of all major companies.
When you are getting price quotes, inquire to look over a sample policy. Bear in mind to understand the entire policy, together with the fine print.
Another advantage of a home warranty policy is that it is transferable. The home warranty is passed on to the new owner. This has proved to be a well-liked feature amongst home buyers.
Homes with home warranties are selling at increased prices and in much shorter times. This in itself could make it sensible to get a home warranty policy.
When a covered appliance breaks down you need to contact your warranty company. A warranty company already has business ties with different service vendors.
They will, in turn, contact a service repairman to come to your home and repair the appliance. The repairman will fix the item or recommend replacing it.
The service repairman will bill your warranty company directly. But you have to pay a service charge when the repair person visits your home.
With any kind of insurance, it is always a good idea to shop around. You should evaluate benefits and prices as most insurance companies will provide you with a policy discount. Ensure you read the policy before writing a check and ask any queries that you have in mind.
So, the conclusion is that home warranty and insurance are complementary to each other. You can choose to protect everything you own, provided you can afford to. Keep in mind that these insurance products do cost a bit more.
But compared to the benefits and the peace of mind you get, it seems like a very small amount. Insure your home as well as buy a home warranty all within your budget.
Yes, you should have a home warranty when buying a condo or a house. Usually, the sellers include a home warranty as part of the sale. A home warranty covers appliances and systems like air conditioning, plumbing, dishwasher and is responsible for items in the condo.
While a homeowner’s insurance covers damage due to fire, theft and natural disaster, a home warranty covers damage due to wear and tear. Based on where you live, you should purchase additional coverage for insurance against earthquakes and floods as most events are not covered.
A standard home warranty would cost around $350 to $500 a year or more based on the type of home warranty company and the plan. This warranty typically covers water heater, electrical systems, sump pump, exhaust fans, kitchen appliances, exhaust fans and ceilings.
You should get a homeowners insurance because this is sure to ensure that your home is covered from natural disasters and theft. If you mortgage your home then your lenders would expect you to have home insurance to protect your home from unforeseen circumstances.
Tags:appliance extended warranty, Appliance Warranty, home insurance, home owners insurance
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