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Home Warranty vs. Home Insurance: Everything You Need to Know

July 6, 2021

Have you ever wondered the difference between a home warranty and homeowner’s insurance? They certainly sound the same, right? While a home warranty and home insurance plans may seem like they’re the same, they are completely different. The coverage, cost, and terms and conditions vary exponentially. For starters, home insurance is a requirement, whereas a home warranty is simply a recommendation.

Home Warranty

A home warranty offers protection for your major appliances, plus plumbing and electrical units. The warranty can cover the cost of repair or replacements in case of a significant breakdown, provided you meet the terms and conditions of the contract.

Warranty plans do vary by company and plan, but most cover the following:

•    Heating, ventilation, and air conditioning

•    Electrical systems

•    Plumbing systems

•    Water heater

•    Kitchen appliances

•    Garage door opener

•    Pools, spas, and well pumps

The benefits of such a policy include help repairing appliances easier, huge savings, and a higher resale value on your home.

Home Insurance

Home insurance, on the other hand, handles uncertain cases, such as a fire, theft, vandalism, and occasionally natural disasters. The cost of damages, depending on your specific plan, will be covered by the insurance provider. The plan may also include personal items and offers liability protection.

You’re covered in the following categories:

•    Structure and contents of your home

•    Personal property (indoor and outdoor)

•    Jewelry

•    Living expenses if your home is uninhabitable during a natural disaster

•    Theft, vandalism, fire, windstorms, lightning, fallen trees

•    Liability coverage will protect the homeowner against someone injured in the property who intends to sue