What’s the Difference: Home Insurance Vs. Home Warranty

How can you tell the difference between home insurance and home warranties?

When you start looking at home insurance, you might also see companies offering home warranties.  Oftentimes, homeowners get confused between these two coverage options and assume that they are interchangeable.  While they may seem similar, home insurance policies and home warranties are actually quite different.  Here’s what you need to know about each coverage option.

  • Home Insurance

A home insurance policy is designed to cover accidental damage to your home and belongings.  Typically, homeowners insurance policies will include a list of covered perils, such as fires, storms, theft, vandalism, and certain natural disasters.  There are four main types of coverage included in standard home policies: dwelling, personal property, personal liability, and loss of use.  It’s also important to note that home insurance policies include a deductible; the amount that the policyholder must pay towards a claim before they can access their insurance coverage.

When you purchase a home, your mortgage lender will require you to secure some minimum level of home insurance coverage.  You also have the ability to customize your homeowners insurance policy by adding other forms of coverage and adjusting your coverage limits and deductibles.  Adjusting your coverage options, coverage limits, and deductible amounts will all affect the cost of your premium.

  • Home Warranty

A home warranty is a service contract that covers the repair or replacement of certain home systems and appliances that may fail due to age, wear and tear, or some other type of internal malfunction.  Oftentimes, home warranties provide coverage for your home’s HVAC, electrical system, plumbing, kitchen appliances, and washer and dryer.  Home warranties are an optional form of coverage that is not required by mortgage lenders.

Please keep in mind that home warranties will only repair or replace the systems and appliances that are specifically listed in the contract.  Additionally, you will not have coverage if a listed system breaks down due to external issues such as fire, storms, and so on.  Instead, warranties only provide coverage for the damages caused by internal mechanical issues.

This is what makes home insurance different than home warranties.  Do you need help securing the right homeowners insurance to meet your needs?  If so, then contact the experts at Robert J. Los Insurance Agency in Hamburg, New York.  Our dedicated team is eager to assist you with all your coverage needs today.