Your home and its contents are some of your biggest assets in life. Protecting them is not just a matter of security, but also a matter of necessity. You probably know the basics about homeowners insurance, but did you know there’s another form of protection known as a home warranty? What is it and what’s the difference between the two?
If you are a homeowner—or looking to be one—here are the finer points of distinction between home warranty and homeowners insurance policies:
Can you go over homeowners insurance again?
Of course! Homeowners insurance protects your home in the following areas: the inside and outside of your home, loss, damage or theft of personal property, and liability in case someone is injured on your property. Accidental damage to your home or property in any of these areas incurred by fires, storms, theft, and certain natural disasters is covered under your policy. Although not legally requisite to own a home, if you have a mortgage your bank or lender will most likely require you to have home insurance. It’ll cost you anywhere between $300-$1000 a year, on average, and all policies include a deductible when you need to replace or repair any damaged property in or on your home.
What about a home warranty?
A home warranty contract, on the other hand, covers the replacement or repair of your home appliances if they malfunction or fail, as all machines are bound to do after years of use. Think electrical, HVAC, kitchen, or plumbing system appliances (and think major headache). Home warranties are also not required to own a home, but their contracts usually last 12 months and cost on average $75, with other systems like pool and spa available as add-ons. A lot of times your service contractor will replace or repair your appliance for the price of the visit, which varies up to $125, and the warranty will cover the rest. The chance of a fire taking out half your kitchen may be unlikely, but a leaky dishwasher and an old dryer are definitely in your future.
Once you learn the differences, it’s pretty simple to remember which does what: homeowners insurance protects your damaged home in case of accident and a home warranty protects your appliances in case of failure. And both will give you peace of mind with your home-related investments.
Which do you need of the two? To learn more about the differences between homeowners insurance and home warranty policies, contact the insurance professionals at McCarty Insurance Agency in Fresno, California.