Homeowners Insurance vs Warranty: What Are the Major Differences?
There are a lot of confusing expenses when you buy a home that needs to be dealt with. Some of them even seem like they are the same thing. This makes you wonder if you even need to pay for everything. Home insurance and home warranties fall under this category. They seem to both do the same thing.
You may be wondering if you need to get a home warranty like American Home Shield if you already have insurance. What does a home warranty cover? They are all different just like insurance is different. In this article, we will go over the differences so you know what you’re getting.
What is a home warranty?
A home warranty doesn’t exactly cover the home. It actually relates more to the contents of the home and covers things like appliances and home systems. If there is a repair needed then the warranty might cover it. For instance, if your HVAC system was installed by a technician and then you start having problems with it, your future costs to repair it will be covered by the warranty since the installation was faulty.
There are some no-fault types of warranties that will cover the repairs even if the problem wasn’t from an installation that went bad. It all depends on the coverage that the warranty itself offers since they are all different.
Some warranties come with the house when you buy just like if you bought a new car. If it doesn’t then you can buy a policy that will save you money down the line. Best Home Insurance Companies
What is homeowners insurance?
If a warranty covers the contents of the house, an insurance policy covers the house and some of the contents. This means that your insurance will be there for protection against things like fire, theft, or water damage to the structure as well as belongings that were in the house.
The key thing to remember is it covers damage from an accident or something similar. It won’t protect you from repair bills if an appliance breaks down, for instance. If your HVAC system is installed incorrectly then your warranty comes into play. If the HVAC system is damaged due to a hurricane then your homeowner’s insurance will cover something like that.
It can even cover you if there is an injury at your home. If your friend were to get injured from falling down the stairs then the insurance will pay for damages.
What are the costs?
This is sort of like asking how long a piece of string is. There are so many factors that go into what the premiums are that you pay that it is impossible to say how much they cost. The thing to remember is that homeowner’s insurance is likely to be something mandatory to have through your bank since they want to cover the collateral. A warranty is not necessary to have but is optional additional protection that many people like to pay extra for to have peace of mind.
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Homeowners Insurance vs Warranty: What Are the Major Differences?
