When buying a new house, homeowners tend to ask themselves which would be between home warranty vs home insurance. For this reason, we’ll go over what each of these covers and why you should consider opting for both options. That way, you’ll have complete protection for your house!
Main Differences Between Home Warranty vs Home Insurance
One of the main priorities among homeowners to count on the necessary protection for it. After all, it is one of their greatest real estate investments. And just like any other investment, a home requires of responsibility as well.
By relying on the right protection that can cover damages from wear and tear, homeowners can feel safe all year long.
Generally speaking, the main difference between home warranty vs home insurance is their coverage. While warranties cover your home’s appliances and systems, home insurance protects your personal property and home’s interior and exterior from any perils. By counting on both options, you’ll get the ultimate protection for your house.
Let’s take a closer look at each of these policies:
What Does a Home Warranty Cover?
A home warranty handles any repair or replacement of your home’s appliances. This service contract ofter can cover your HVAC systems, kitchen appliances, plumbing, and more. In some cases, you can even cover larger features, such as a pool. However, in order to cover these appliances and systems, you’ll need to pay an extra fee.
Moreover, a home warranty plan typically lasts 12 months. In case you are applying for a mortgage, be aware that a home warranty isn’t necessary. However, it’s a smart investment if you want full coverage on your home.
When it comes to price range, the typical home warranty can cost your between $300 to $500 yearly. In case there are any damages, you’ll also need to pay a deductible as well. Then, you won’t need to worry about any other additional costs since the home warranty company will handle them for you.
Believe it or not, homeowners can benefit greatly from warranties. Although it might not seem like it, warranties can help you keep costs low in case of any misfortunes. For instance, a service call for a plumbing emergency can cost you up to $125. Not only do you have to worry about inspection costs, but also you’ll need to think about replacement expenses as well.
By having a home warranty, you can have the peace of mind that if any tragedy happens, you’ll count on the coverage you deserve. Lastly, you can transfer a home warranty onto the next owner.
What Is Homeowners Insurance and What Does It Cover?
Homeowners insurance, on the other hand, covers your home interior, exterior, and personal property against damage or loss coming from any natural disasters, thefts, fires, and more.
In other words, this insurance covers any repair or replacement costs that come from perils. Homeowner insurance may even count liability protection resulting from accidental damages to other’s personal property. Of course, if you wish to add extra policies for greater protection, you can always let it know to your insurance company.
Unlike a home warranty, mortgage lenders require a minimum premium on homeowner insurance. The reason behind this is because insurance reduces the chances of someone missing any payments.
In most cases, these policies’ price range can be between $300 to $1000 yearly. Additionally, it’s very likely that you’ll need to pay a deductible before benefiting from the insurance. Keep in mind that there are certain elements that basic home insurance doesn’t include, such as floods and earthquakes.
Luckily, you can go over your insurance agent to specify which are the deductibles and coverage limits. That way, you’ll be able to know if the policies suit your needs. Not only that, but you’ll be able to know if you’re eligible for discounts coming from a good credit score!
Why You Should Be Opting for Both Options?
Although most homeowners tend to go only for insurance, you must know that, in order to get the peace of mind you deserve, you need both. By relying on both a home warranty and home insurance, you’ll provide protection to almost every element of your house.
For this reason, you must keep in mind a couple of things before purchasing both options. By doing so, you’ll be able to know if you’re counting on the right coverage at the best price.
For instance, you’ll need to know the limits each insurance and warranty has. In the case of insurance, be sure to know the main damages that are included and excluded.
When it comes to warranty, be mindful which are the appliances and conditions specified on the policy. There are some cases in which warranties won’t cover for any older appliances. It’s also a good idea if the contractors needed for replacements and repairs are among a certain network or you can choose anyone.
Lastly, one thing you can do to make sure if you’ll benefit from having both warranty and insurance is by reading the fine print. By checking exactly what your home insurance has, you’ll know any gaps that need to be filled out. In case your insurance doesn’t include the protection you want, you can acquire a warranty that’ll complement it completely.
Can I Make My Insurance and Warranty Costs Lower?
Just like any insurance policy, you can make both your home insurance and home warranty premiums lower. For instance, one great factor that might influence your insurance cost is your credit score. That’s why it’s always a good idea to present your credit and online billing history when looking to qualify for these discounts.
Another great way to lower insurance and warranty rates is by raising deductibles. Lastly, as you may imagine, premium costs might decrease by counting on lesser coverage.
By knowing the main difference between home warranty vs home insurance, it’s time to protect your home from any mishaps! In case you’re considering opting for both options, be sure to count on a professional insurance company by your side!