The Difference Between Home Warranty & Home Insurance


When purchasing a new home, it's important to do in-depth research on all aspects of the home buying process. One thing you'll need to understand is how to best protect yourself and your investment if anything were to go wrong. Check out the information on home insurance vs home warranty below to educate yourself on your options!


Home Insurance.

Homeowners insurance pays for any accidental damages and loss that are caused by fire, lightning strikes, windstorms, and hail, however damage from earthquakes and floods is typically not covered unless a separate policy is purchased. It also covered the replacement of personal property in case of theft or damage and liability if a person were to get injured in your home or on your property. The average annual cost of a homeowners insurance policy ranges between $300 and $1,000 and the bank usually asks you to obtain a policy before the mortgage is issued. Make sure to keep in mind that each type of coverage in the policy is subject to a limit and, in most cases, you will have to pay a deductible.


Home Warranty.

A home warranty is designed to cover the cost of repairs and replacements of larger appliances and crucial systems in your home that may fall or break due to age and wear & tear. This includes but isn't limited to HVAC, electrical, or plumbing components, kitchen appliances, and your washer & dryer. With a home warranty, you are required to pay premiums year round, even if you do not use it, and it won't cover damages if appliances were not maintained properly or if the damage is from a fire or other disaster. When working with a real estate agent, most will include this in your offer to a seller for a 1 year contract to make sure you're covered if anything major happens within the 1st year.

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