When looking into home warranty and home insurance, you should be aware of the notable differences between them before choosing one over the other. However, the bottom line is that insurance can cover unexpected events leading to damage, while a warranty may only cover somewhat expected events.
Understanding Homeowners Insurance
Owning a home is a great investment and an asset you will want to protect as much as possible. To do so, you should consider purchasing a homeowners insurance policy and a home warranty. Combined, they cover your property, belongings, appliances, and different systems within the home if they are damaged or in need of repair.
Home insurance covers accidental damage that may occur due to theft, a fire, or a natural disaster. Under this kind of insurance policy, certain areas of the home are protected, including the interior and exterior of the home, personal property, loss, or damage. There is also a general liability clause in case someone were to get injured on your property.
Home insurance policies are typically mandatory when you finance the home. The bank won't issue the mortgage unless you obtain a home insurance policy for the home you are purchasing. The average cost for this kind of policy each year can run between $300 and $1000. They often have a deductible that needs to be paid before the policy takes care of any costs.
Understanding Home Warranty
Home warranty, on the other hand, is more of a contract that allows for the repair or replacement of any components or equipment in the home that may have failed. Warranties often cover damage associated with aging as well as wear and tear. The home's HVAC system, electrical and plumbing, and appliances such as the dishwasher and refrigerator can typically be covered by a home warranty.
These warranties often only have a term of approximately 12 months. They are not required to obtain a mortgage on the home. The average cost for a home warranty is around $75 per month, depending on the plan you purchase and the appliances you want to cover.
Making The Choice
When it comes down to it, you really can't choose one over the other. Homeowners insurance policies are often required, while home warranties are a personal preference. However, having both in place can help you achieve a better position financially when it comes to your home and property.
You will be covered for unexpected and expected expenses alike when it comes to the home and its systems. You will not have to scramble at the last minute or drain your savings when something terrible happens. So consider the differences between the two and leverage them for the amazing benefits they each can provide you as a homeowner.
For more information on how to obtain the best insurance policy for your needs, don't hesitate to contact us by visiting us today. You can inquire about bundling your home and auto insurance to make things more manageable for you.