To protect your home you need to zero in on the best types of home insurance and home warranties.
You’re probably aware of home insurance and home warranties, but are unclear on what separates these two products. Read on to learn the difference between a home warranty and homeowner’s insurance because each can help you protect your investments in different ways.
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The Basics of Home Insurance
Many companies offer homeowner’s insurance and home insurance policies include many different options for coverage. But, in its simplest form, insurance covers your home in the event of damage or theft. Mortgage lenders usually require home insurance as a condition of mortgage approval.
Every standard home insurance policy in the United States incorporates six types of protection:
- Dwelling coverage: basic protection for the home itself when it is damaged
- Other structures coverage: protecting structures outside your house, including garages and fences
- Personal property coverage: protecting your belongings inside the home in the case of damage or theft
- Loss-of-use coverage: living expenses you may incur if you can't live at home due to damage
- Personal liability coverage: protection if you are sued for damages or injuries to someone else inside your home
- Medical payments coverage: protection for medical bills if someone is injured on your property or by your pet
While standard insurance policies do typically cover the aforementioned items, there are many add-ons that you can purchase.
For example, you may want to add extra coverage for valuables, such as laptops, PCs, game consoles, jewelry, and antiques, because these items may exceed the value of your insurance policy.
Homeowner’s insurance does not usually cover natural disasters like floods and earthquakes and dangers including fire, flooding, hail, and lightning. Thus, you may need to buy an additional policy from your provider or seek out insurance, depending on what may affect your home.
For example, if you live in an area that commonly experiences earthquakes or you live in a low-lying coastal zone that is prone to flooding, it would be smart to purchase the additional policy.
Before making a purchase, check with your provider to find out explicitly what your policy covers.
Home Warranty vs. Home Insurance
Now that we’ve established what homeowner’s insurance covers, let’s discuss the difference between home warranty vs. insurance. A home warranty is effectively a service contract that covers systems and appliances in your home.
Typically, home warranties will cover systems such as heating, air conditioning, plumbing, and electrical — basically the guts of your home that keep everything running properly. Some home warranties can be more expansive and cover appliances such as washers, dryers, refrigerators, stoves, and more.
To make it clearer how a home warranty differs from home insurance, let’s use the example of a heating system gone wrong. If your heater goes on the fritz and increases the temperature in your home dramatically, this could start a small fire. The fire that damages your space would be covered by home insurance while the repairs needed to fix the heater would be covered by your home warranty.
A home warranty can provide peace of mind in your home when you want to protect yourself against costly repairs to systems, appliances, and other devices in the home. As these systems and appliances age, the likelihood of them breaking down increases. A home warranty can save you the stress of worrying about these inevitable breakdowns.
Types of Home Warranties
Just as there are different add-ons and types of home insurance policies, not all home warranties are alike. Home warranty companies vary in what they cover and some older companies only can offer you help with home systems.
Smart home warranty companies, on the other hand, can configure a warranty that makes sense for your home and valuables. Customizable plans can cover you for whatever you actually own or only what you want to protect.
Home warranties from a smart home warranty company can cover the following:
- Full unit coverage for appliances, HVAC, electrical, and other home systems
- Extended product warranties on appliances such as washers, dryers, and portable AC units
- Extended product warranties on devices such as smart speakers, video doorbells, computers, smartphones, tablets, smartwatches, and game consoles
- Help with setting up and maintaining home wi-fi systems
- Smoke detector, fire extinguisher, and carbon monoxide detector set up
- HVAC filter cleaning
- And more
Home Warranties Make Your Home Insurance Better
While home insurance is required for most home purchases, sometimes new home buyers decide against home warranties. However, home warranties can effectively enhance home insurance by providing broader coverage and protecting you against things that insurance doesn't cover.
Home insurance only protects the basic structure and valuables, but it doesn’t help you when your HVAC system or dishwasher breaks. A home warranty serves a complementary role in protecting your humble (or not so humble) abode and all the valuable things inside it. With a better understanding of home warranty vs. home insurance, you can clearly see why it would be smart to get both.
If you’re trying to make a decision on a home warranty, HomEase offers multiple home warranty plans so you can pick the plan that works best with whichever systems, appliances, and devices you own. If you want to just cover some items for repair and have on-demand repair service for those items, we are happy to work with you.
Protect your wallet and say goodbye to stress with our product care and home service warranties. Learn more about HomeEase’s home warranty plans.