Do you have a home warranty? What about home insurance?
If you just moved into a new house, you will likely have a lot of expenses on your plate. Along with decorating, renovating, and securing your new home, you have to find the correct coverage to protect your investment.
One of the most important factors of home ownership is insurance. You need insurance to cover any damages or losses. One of the most common homeowner’s insurance policies is a home warranty.
So what is the home warranty and how does it compare to homeowners insurance?
Let’s go over the differences between homeowners insurance vs home warranty so you can make the best decision for your situation.
What is Homeowners Insurance?
Homeowners insurance is a type of property insurance that covers your home in the event of damage or loss. It’s typically required by lenders if you have a mortgage on your home.
Homeowners insurance can cover things like fire damage, theft, wind damage, vandalism, and more. Homeowner insurance policies usually last as long as you own your home.
What is a Home Warranty?
A home warranty is a service contract that covers the repair or replacement of major home systems and appliances. Most home warranties cover things like your furnace, air conditioner, plumbing, and electrical systems.
Some home warranties also cover appliances like your fridge, dishwasher, and oven. Then there are some that offer coverage for things like pool and spa maintenance or guest accommodations.
If something breaks down, you can call the warranty company and they will send a technician to fix it or a home warranty will pay for the repair or replacement. Home warranties typically last for one year and can be renewed.
Home warranties can be a great way to save money on unexpected repairs, but they don’t cover everything in your home.
Is Homeowners Insurance and Home Warranty the Same?
No, homeowners insurance and home warranty are not the same.
Homeowners insurance protects your home and personal belongings from damage or destruction caused by perils like fire, theft, and weather events.
A home warranty, on the other hand, covers the repair or replacement of major home systems and appliances when they break down from normal wear and tear.
How Much Does Homeowner Insurance Cost?
Homeowners insurance premiums vary depending on the value of your home, the amount of coverage you need, and the deductible you choose. The average annual premium for homeowners insurance is between one thousand and two thousand dollars.
How Much Does Home Warranty Cost?
A home warranty typically costs between $300 and $500 per year, while homeowners insurance premiums can vary widely depending on the value of the home and the coverage amount.
A home warranty typically covers items like HVAC systems, plumbing, and major appliances, while homeowners insurance typically covers damage caused by events like fires, storms, and theft.
Which One to Choose?
Both will cover the dwelling, personal property, and liability. Both will also have deductibles.
The main difference is that a home warranty covers maintenance and repair costs while homeowners insurance covers damage and replacement costs.
If you have a mortgage, your lender will likely require you to have homeowner insurance. Even if you don’t have a mortgage, it’s still a good idea to have coverage in case of an unforeseen event.
Homeowner insurance can give you peace of mind knowing that your home and belongings are protected. So, which one should you get?
If you are buying a home, you will most likely need both. If you are not buying a home, you may not need a home warranty, but it could still be a good idea to have one.
Limits and Exclusions
New home insurance also has limits and exclusions on what is covered, while home warranties have a set amount they will pay per item or system.
Home warranties also often cover items not included in most homeowners insurance policies, such as septic systems and major appliances.
Where to Get One?
To get homeowners insurance, you’ll need to shop around and compare rates from different insurers. Be sure to read the fine print so you understand what is and isn’t covered by your policy.
Once you’ve found the right policy for you, be sure to keep up with your payments to keep your coverage in force.
When you purchase a new home, the builder or developer offers a home warranty. However, you can also purchase a standalone policy from a home warranty company.
Some home warranty companies even offer coverage for pre-owned homes. Be sure to carefully read the terms and conditions of any home warranty policy you’re considering so you know exactly what is and isn’t covered.
You deserve a safe, functioning home and need the right insurance and warranty to achieve it.
Homeowners Insurance vs Home Warranty Secrets Revealed
If you’re trying to decide whether to purchase homeowners insurance or a home warranty, it’s important to understand the difference between homeowners insurance vs home warranty.
Homeowners insurance covers damage from events like fires, storms, and theft, while home warranties only cover repair and replacement of appliances and systems.
Homeowners insurance is typically required by your mortgage lender, while a home warranty is optional. Be sure to carefully consider your needs before deciding whether to purchase a homeowners insurance policy or a home warranty.
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