Home Warranty

Home warranty and homeowners insurance are two totally different things. Though they are both tied to your home to give you some kind of protection from financial burden. However, they provide their coverage in their separate ways, individually.

Ultimately, you can purchase homeowner insurance and also have a home warranty. Nothing beats being protected from financial expenses. Therefore, it is important for you to know how to differentiate between a home warranty and homeowner insurance. So that in case you decide to buy your home, you should know what is in your interest or what you should not do.

What is a Home Warranty?

A home warranty is a contract or a service plan between a homeowner and a home warranty company. This company provides coverage for repairs and the replacement of your household appliances.

A home warranty is an annual service plan that helps to protect you from the financial burden of replacing or repairing your major home appliances. So, when your major home appliances break down due to aging or become faulty, your home warranty company bears the financial expenses. Basically, you do not have to worry about unexpected expenses that you never budgeted for.

Appliances that can be covered under a home warranty

• Dishwashers
• Air conditioners
• Heating system
• Laundry system
• Swimming pool
• Built-in microwave
• Plumbing work
• Refrigerator
• Furnace
• Electrical system
• Garage door system
• Ventilating system

The reason why you should have a home warranty

Basically, among other things, there are the major reasons why you must ask for a home warranty. As we’ve stated above, homeowner insurance and home warranty are very different coverages that you must have as a homeowner.

Now, these are some of the reasons why you must have that annual service plan.

Buying an old home

When you set out to buy those beautiful but old homes, you must involve yourself with the home warranty annual plans. Here’s why.  Most of the appliances in those homes may be really old and on the verge of breaking down due to wear and tear. Therefore, home warranty provides you the coverage from unexpected financial loss.

Financial cost

Firstly, you must have spent a ton in purchasing your home. Your pocket should take a break from getting dipped into. So imagine that 3 major systems and appliances stopped working at once. The cooling system, the plumbing work, and the washer.

You call your homeowner insurance company, and they tell you that they do not cover that part of your home. Therefore, you must spend excessively replacing your cooling system, repairing the plumbing work, and replacing the broken washer after paying to get it fixed without success. Now, imagine the financial stress you must pass through to repair and replace all.

Peace of mind

If you’ve ever worried about the next appliance that will break down and your budget, then, it’s time you have a talk with a home warranty company agent. The majority of the time, these appliances don’t give a warning or sign before they break down.

And, you don’t have to keep adjusting your budget and losing sleep over the next appliance or system in your home. So directly or not, your peace of mind is tied to knowing that if you notice a faulty or broken appliance in your home, all you have to do is to place a call to your home warranty company.

Homeowner insurance vs Home Warranty

If you’re still confused about the coverage offered by homeowner insurance and the coverage home warranty offers, here is a typical and relatable examples.

Homeowner insurance

Karen buys herself a home and was smart enough to also purchase a homeowner insurance policy to cover any loss that may happen with her home. A few years down the line, a bolt of lightning struck her home and the entire building went up in flames. Karen placed a distress call to her homeowner insurance company.

Then, after some paperwork, a construction company moved in and started rebuilding Karen’s house. But surprisingly, Karen wasn’t paying for the work that is going on. Her homeowner company bore the financial cost.

Obviously, homeowner insurance protects your home and you from financial loss that affects your home like

• Fire
• Natural disasters
• Theft and any other thing included in the policy.

Home Warranty

Meanwhile, Tony on the other side of the state got a home warranty for his home. A few days later, he noticed that the ventilating system in his new home is faulty including his built-in microwave. Immediately, he placed a call to his homeowner insurance company. But he was disappointed when they explained to him that his policy does not have a clause for home appliances or systems.

Finally, Tony remembered his home warranty and quickly called the company. In less than an hour, a service and maintenance person sent by his home warranty company knocked on his front door.

So, with these examples, you can see that homeowner insurance takes care of damage to your home while home warranty takes care of the repair and replacement of your appliances and systems in your home.

Can I have a home warranty and homeowner insurance?

It’s a resounding yes, after all. Both work to lift off any financial stress you may encounter in the future from owning a home and keeping the home running smoothly.

Also, both give you some peace of mind in their respective capacity.

Home warranty drawbacks

While it is a good idea to purchase a home warranty. However, there are drawbacks you must equally face.

Maintenance Gary Area

Now, a home warranty is all nice and dandy until it gets to an expensive appliance that was misused. Home warranty companies cover only the repair or replacement of appliances that you used and maintained properly. No matter your claims, they only believe in taking care of what only broke down through normal wear and tear.

And not any appliance that got broken through misuse or mishandling. So, the gray area is the appliance that had proper maintenance. Therefore, buying a home that had its appliances previously misused by former owners could pose a problem. However you try to protect it, when it falls apart, your home warranty company may find it hard to step in.