Homeowners Insurance vs Home Warranty: What is Covered by Each?

When you’re looking to buy a new home, one of the most important things to consider is whether or not you have the coverage you need. Often, when you’re shopping for home insurance, you’ll see two options come up: a home warranty and home insurance. While both have their merits, when comparing a home warranty vs home insurance, remember that they are not the same.

In this article, we dive into the differences between homeowners insurance vs home warranty coverages. If you are renting or buying a home and looking for insurance coverage then our team is happy to help you find the best coverage at the best price. You can quickly compare rates for free on our website.

While most people need homeowner’s insurance, choosing a home warranty isn’t always cut and dry. Here are some things to consider when comparing the two.

Home Warranties vs Home Insurance

Buying a home is an emotional and financial investment. It’s understandable to want to make sure your purchase is protected in case something bad happens. Home warranties and homeowner’s insurance policies offer different types of protection, but there are some important distinctions you need to be aware of.

When you own your home, you become responsible for any and all repairs on essential household appliances and systems. Home warranties offer a way to prepare for unexpected repairs that may need to be made. When purchasing a home warranty, you will pay an upfront fee as well as service call fees in order to have the service contract cover most major appliances or systems in your home. Home warranties are not a required purchase, but they can provide peace of mind if something does go wrong.

Homeowner’s insurance policies offer comprehensive coverage for potential damage to your home, as well as your belongings. This protection can include damage to the exterior of your home, your fence, other structures on your property, and even inside items. In most cases, you’ll need homeowner’s insurance before a bank will approve a mortgage on your home. Coverage can include damages caused by fire, some weather events, theft, and vandalism.

What Does a Home Warranty Cover?

Home warranties can be a great way to protect your home from the big problems that can occur. A one-year warranty may cover most of the major systems in your home, such as your heating and cooling system, plumbing, electrical wiring, and appliances. Plus, additional coverage may be available for more expensive systems like a pool or spa.

Your home warranty may include rules about how an item will be repaired or replaced. This could include requiring a specific company to complete the repair, depending on the type of warranty you have. There could also be restrictions on what is covered under a manufacturer’s warranty, so it is important to read your policy carefully.

If you’re moving into a new home, your builder may offer a warranty on workmanship and materials. This may include parts of the home like HVAC systems, plumbing systems, electrical systems, windows, siding, doors, drywall, and even major structural components such as the roof.

Do I Need a Home Warranty?

A home warranty is a great option for those who are in the process of buying a home or are new homeowners. Home warranties provide peace of mind after investing so much money in your home and can help to protect you from unforeseen repairs or problems that may occur after you have moved in. The cost of a home warranty company is likely much less than paying for repairs out of pocket. So if you’re looking for added protection, consider signing up for a home warranty.

If you’re considering buying a home that someone else has already lived in, you’ll want to make sure the appliances and systems are up to par. If the home inspection finds that some of the systems need to be replaced soon, a home warranty could come in handy. In some cases, motivated sellers might even purchase a home warranty for you, the buyer.

When buying a brand new home, it is important to consider whether the builder is offering a home warranty. The benefits of purchasing a home warranty vary depending on the type of home you are buying, but regardless of the type of warranty if you are the type of person that doesn’t mind paying money now to have peace of mind later, a home warranty could be worth considering.

Do I Need Home Insurance?

No matter how you bought your home, whether with cash or with a mortgage, it’s important to have homeowner insurance. Unless you purchase your home outright, your lender is likely going to require you to show proof of your policy before your mortgage can be issued. While the hope is that you’ll never need to use it, a homeowner’s insurance policy can help repair or replace items that are damaged or stolen, as well as help you get back on your feet if you lose your home entirely due to a covered disaster.

It’s important to review the policy documents carefully when purchasing homeowner’s insurance in order to make sure that all of your belongings are covered. In some cases, an extended coverage endorsement may be a good idea to protect your home against unforeseen situations. The first step is getting a quote, so you can decide whether additional coverage is necessary and what home insurance discounts you may qualify for.

Not sure how much coverage you need? We want to help you find the best homeowners insurance for your home, and we’re here to guide you through the process. You can get coverage limits and add features like flood insurance or property damage protection with our licensed agents.

Compare rates now and let us help you get the most out of your homeowners insurance policy!