What is the difference between a homeowners insurance policy and a home warranty?

Owning a home requires ongoing and sometimes expensive repairs, from fixing a broken oven to a washing machine to replacing a leaky roof. Depending on what needs to be repaired or replaced and why, homeowners insurance will help in one area, while a home warranty may help in other areas. Both can give you adequate protection.

Hhomeowner’s insurance covers four main areas under your policy in case of loss due to a disaster such as fire, theft, windstorm, lightning, falling tree, vandalism and many other damages. It covers:

• The Interior and Exterior structure of your home
• your personal belongings
• It also protects against a claim or lawsuit resulting in bodily injury or property damage to others caused by an accident on your property or from your personal activities anywhere.

HAS home warranty it is a form of coverage you can use to supplement your homeowners insurance policy and will protect you from the cost of repairs not covered by the policy; you can pick up where your homeowners insurance leaves off. There may even be a possible overlap in coverage between the two. Check with your insurance agent and home warranty representative for the details of each of the coverages.

• It is an annual service contract that lasts for one year, it’s not a policy. You typically do not carry a deductible, but rather a service charge, each time a service professional comes to your home. The average cost is usually $300.00 – $900.00 per year.
• An owner can add optional coverages, such as coverage for a pool and spa equipment, septic tank, etc.

• The cost of the service call will range from $40.00 to $100.00 per visit and per item.

It typically covers things like: air conditioning, heating, plumbing, major appliances, and items that a standard home insurance policy would not cover.

For example, if your washing machine leaks and the water damages the floor, your homeowner’s insurance policy may cover the damage to the floor, but not repair or replace the washer. Your home warranty would cover the repair or replacement of your home.

Another example is if your water heater exploded and caused damage to the walls of your home, your homeowners insurance would cover the cost of repairing the wall, while the home warranty would replace or repair the water heater.

Remember it home warranties are No substitutes for a homeowners insurance policy and that each company will not offer you the same coverage. Specific disasters and/or exclusions will vary with each individual policy.

If you have any questions about your policy, please contact your insurance agent or home warranty representative.

This article does not include all available information on homeowners insurance or home warranties, it is for informational purposes only.