
Buying a home comes with a whole new vocabulary. Two terms you’ll hear a lot are “home warranty” and “homeowners insurance.” While both offer protection for your home, they cover very different things. Confusing them can lead to some unpleasant surprises when you need to make a claim, so let’s break down the key differences.
Homeowners Insurance: Protecting Your Investment
Homeowners insurance is your home’s safety net against major disasters. In most cases, mortgage lenders require it—and for good reason. This type of insurance protects the structure of your home and your belongings from unexpected events like:
- Fire and smoke damage: Your insurance will help you rebuild or repair your house if it should catch fire.
- Theft and vandalism: You can use insurance if someone breaks in and steals your valuables or damages your property.
- Natural disasters: Homeowners insurance will depend on where you live and what policy you take, but it will cover property damage from tornadoes, hurricanes, and earthquakes. (Note: In ordinary circumstances, it’s usually a separate policy.)
- Liability: Your homeowners insurance helps cover medical expenses and legal fees if your property is the site of an injury, and the injured person sues you.
In short, homeowners insurance is meant to protect homeowners against the large, unpredictable, and often insurmountable events that will break your home and the dollar value of its contents.
Home Warranty: Covering Wear and Tear
While a home warranty is like a service contract for the major systems and appliances in your home, it’s supposed to take care of normal wear and tear as these things age. A home warranty typically covers:
- Appliances: The appliances that make life easier: your refrigerator, oven, dishwasher, washer, dryer, and so on.
- HVAC system: The heating, ventilation, and air conditioning system that keeps your home livable year-round.
- Plumbing system: Pipes and water heaters, just in case leaks start popping up.
- Electrical system: Wiring to outlets and electrical panels.
Damage from fire or a break-in will not be covered by a home warranty. But if a normal appliance or system breaks down simply because of age and use, it will help pay for replacing or repairing it. For example, your home warranty should cover a dishwasher breaking down after years of use, but your homeowners’ insurance should cover a fire destroying your dishwasher.
Why You Might Want Both
While they cover different things, homeowners insurance and a home warranty can work together to provide comprehensive protection for your home. Homeowners insurance protects your investment from major disasters, while a home warranty helps you manage the everyday costs of homeownership. The two working together will ensure you are not blindsided by unexpected home repair or replacement costs.
Choosing a reputable home warranty provider like Contractors United is key. Unlike other companies, we don’t deny claims based on technicalities. We understand that things wear out, and we’re here to help you keep your home running smoothly. Give us a call or check our website. We are always available to answer your questions.