A lot of steps go into buying a home, whether you’re a first-time buyer or an experienced owner. From getting your credit score up to par and shopping around for the best mortgage to getting through the inspection process and obtaining homeowners insurance, the list goes on — not to mention, actually finding the perfect home.
And when you finally do get through it all, you get to relax and kick your feet up, right? You’re covered should, God forbid, anything happen.
Well… not so fast.
Many folks mistakenly think that homeowners insurance covers their all of belongings 100 percent, no questions asked. But that is not the case. Homeowners insurance does not cover large appliances and home systems like the plumbing and HVAC. A home warranty is necessary to cover these things.
Navigating through homeowners insurance versus home warranties can be tricky. So we’ve outlined some points below to help you understand how they differ.
Homeowners insurance vs. home warranty coverage
According to SFGate, homeowners insurance is typically a requirement if you have a home mortgage, because it protects the lender’s interest in your property. Homeowners insurance covers the repair of structural damage to your home in the event of damage due to a natural or man-made disaster such as fire, wind and water. It also offers liability protection from lawsuits — for instance, if a passerby got injured on your property.
However, homeowners insurance does not cover the breakdown of the items and systems in your home. That is covered by a home warranty, which you would need to purchase separately. According to TotalProtect, home warranties cover the cost of repairing or replacing large appliances and home systems such as plumbing and electrical units that break down due to everyday use.
Home repairs can be extremely expensive. And let’s face it, there’s never a good time for an unexpected refrigerator fail or haywire washing machine. The benefits of having a home warranty include getting your appliance or home systems repaired quickly while saving a sometimes substantial amount of money. Placing a claim is typically easier with a home warranty than homeowners insurance, too.
Having a home warranty in place means that the cost of repairing — or replacing — your (often times expensive) home items doesn’t come out of your own pocket. Plus, most home warranties come with some sort of guarantee, offering you even more protection.
The bottom line
Like anything else, it is essential to do your own research on both your homeowners insurance policy and a home warranty. Being armed with the right information is the first step to ensuring you are covered in the event that an appliance or home system breaks down.
Because when you finally get your home just how you want, the last thing you want to have to do is spend your hard earned money on repairs or replacements. Further, you can’t put a price on your own peace of mind.
