Do You Know the Difference Between Home Warranty and Home Insurance?
When buying a new home, you need to know the difference between a home warranty and home insurance. That is why today we will talk about the coverage of each of these and the reasons why you should opt for both options. In this way, you can get complete protection for your house!
Main Differences Between Home Warranty and Home Insurance
One of the main priorities among homeowners is to have the necessary protection for it. After all, it is one of your biggest real estate investments. And just like any other investment, a home also requires responsibility.
By having the right protection that can cover damage of all kinds, homeowners can feel secure year-round.
Generally speaking, the main difference between a home warranty and home insurance is their coverage. While warranties cover the appliances and systems in your home, home insurance covers your personal property, as well as the interior and exterior of your home, from any danger.
By having both options, you get maximum protection for your home. Let’s take a closer look at each of these policies:
What Does a Home Warranty Cover?
A home warranty covers any repair or replacement of home appliance systems. This service contract can often cover your ventilation systems, kitchen appliances, plumbing, and more. In some cases, it can even cover larger systems such as swimming pools. However, for this additional coverage, you will have to pay a higher rate.
Also, a home warranty plan typically lasts 12 months. In case you apply for a mortgage, keep in mind that it is not necessary. However, it is a smart investment if you want full coverage of your home.
When it comes to price range, a typical home warranty can cost anywhere from $300 to $500 a year. In case there is any damage caused, you will also have to pay a deductible. After that, you will not have to worry about other additional costs, since your guarantee company will take care of them.
Believe it or not, homeowners can benefit greatly from warranties. Although it may not seem like it, warranties can help keep costs down in the event of a mishap.
For example, a service call for a plumbing emergency can cost you up to $125. Not only do you have to worry about inspection costs, but you’ll also need to think about replacement costs.
By having a home warranty, you can rest assured that if tragedy strikes, you’ll have the coverage you deserve. Lastly, you can transfer a home warranty to the next owner if you like.
What is Home Insurance and what does it cover?
Homeowners insurance, on the other hand, covers the interior, exterior, and personal property of your home against theft or damage resulting from natural disasters, theft, fire, and more.
In other words, this insurance covers any repair or replacement costs that come from hazards. Home insurance may even include liability coverage resulting from accidental damage to the personal property of others.
Of course, if you want to add additional policies for more coverage to protect your home, you can always let your insurance company know.
Unlike a home warranty, mortgage lenders require a minimum premium for home insurance. The reason behind this is that insurance reduces the chances of someone missing out on any payments.
In most cases, the price range for these policies can be between $300 and $1,000 a year. In addition, it is very likely that you will have to pay a deductible before you can benefit from the insurance. Keep in mind that there are certain items that are not included in basic home insurance, such as insurance against floods or earthquakes.
Fortunately, you can ask your insurance agent to specify what the deductibles and coverage limits are. In this way, you will be able to know if the policies adapt to your needs. Not only that, but you’ll also be able to find out if you’re eligible for discounts from a good credit score.
Why Should You Opt for Both Options?
Although most homeowners tend to opt for only one insurance, you should know that in order to have the peace of mind you deserve, you need both coverages. By relying on both home warranty and home insurance, they will provide protection for almost everything in your home.
For this reason, you should keep a couple of things in mind before purchasing both options. By doing so, you’ll know if you have the right coverage at the best price.
For example, you will need to know the limits that each insurance and guarantee has. In the case of insurance, make sure you know the main damages that are included and excluded.
When it comes to warranty, keep in mind what are the appliances and the conditions that are specified in the policy. There are some cases where warranties do not cover any appliance that is an older model.
It’s also a good idea to find out if the contractors needed for replacements and repairs are in a certain network or if you can choose any.
Finally, one thing you can do to make sure you benefit from the guarantee and insurance is to read the policy contract. By verifying exactly what your home insurance has, you’ll know any gaps that need to be filled. In the event that your insurance does not include the protection you want, you can purchase a guarantee that will fully complement it.
Can I Reduce the Costs of my Insurance and Warranty?
As with any insurance policy, you can lower your home insurance and home warranty premiums. For example, a big factor that could influence the cost of your insurance is your credit score. That’s why it’s always a good idea to submit your credit and billing history online when looking to qualify for these discounts.
Another great way to lower insurance and warranty rates is by increasing deductibles. Finally, as you can imagine, your premium costs can go down with less coverage.
Knowing the main difference between a home warranty and home insurance, it’s time to protect your home from any mishap. In case you are considering going for both options, make sure you have a professional insurance company by your side!