Home Insurance Vs Home Warranty Understand The Differences Between These Policies

What do you know about home warranty policies? You might think that a home warranty is a type of homeowners’ insurance policy. On the contrary, home warranties are completely separate from homeowners’ insurance. These two types of policies offer protection for homeowners’ belongings in different ways. Understanding the differences between them will help you make the best decisions when it comes to protecting your property. This information is valuable whether you’re a longtime homeowner or a first-time home buyer.

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When you apply for a mortgage, you must also buy a home insurance policy. Legally, you’re allowed to own a house without home insurance, but mortgage companies require that you purchase it to protect their interests. Unless you’re buying your house with cash, you’ll need home insurance. Home warranties are not mandatory or legally required in any way. Although your mortgage company won’t demand proof of a home warranty, you can use one to protect your belongings.

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If the previous owner of your home purchased a home warranty from TotalProtect and the policy remains in effect when you take ownership of the house, the policy can transfer to you. You probably won’t have to pay the premium, but you will have to pay whatever deductible the policy calls for if your home needs repairs. Home insurance, on the other hand, does not transfer between home owners; you have to buy your own home insurance policy for each home you buy.

Home Insurance Covers Natural Disasters and Calamities

Though the specifics of each home insurance policy differ, overall home insurance covers damage to your home caused by natural disasters or calamities. Personal belongings fall under the umbrella of home insurance, so you’ll be able to replace many of your possessions, including appliances, if a natural disaster (such as a hurricane) or calamity (such as a fire) damages or destroys them. However, home insurance doesn’t cover other types of damage, such as aging appliances or wear and tear.

Home Warranties Cover Appliances and Systems

Your appliances, plumbing, and electrical system all fall under the umbrella of home warranties. Unlike home insurance, when you have a home warranty, you can call for a repair no matter the reason. You’ll have to pay a deductible —  just like you do with home insurance claims. The warranty covers the rest of the repair costs based on your warranty’s terms and conditions. Both homeowners’ insurance policies and home warranties might impose limits on damage claims.

Some of the covered appliances and systems include refrigerators, dishwashers, clothes washers and dryers, air conditioning units, furnaces, electrical wiring, plumbing infrastructure, and more. Instead of staring at a hefty repair bill, you can get your system or item fixed without worry.

If you don’t have homeowners’ insurance coverage and a home warranty, you might worry about astronomical repair bills and other issues. These products give you peace of mind and protect your investment. A home warranty can fill in the coverage gaps that homeowners’ insurance policies leave, ensuring that you remain fully covered.

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