Home Insurance vs Home Warranty

When it comes to protecting your home, it’s easy to get confused about the roles of home insurance and a home warranty. While both provide valuable protection, they cover very different aspects of homeownership. Let’s break down the key differences and provide examples to help you decide what you might need for your home.

What is Home Insurance?

Home insurance is a policy designed to protect your home and personal belongings from unexpected events, known as "perils," such as natural disasters, theft, or accidents. Most mortgage lenders require homeowners to have a home insurance policy as part of their loan agreement.

Typical perils covered under a standard home insurance policy include:

• Fire and smoke damage: For example, if an electrical fault causes a house fire, your home insurance would cover repairs.

• Windstorms and hail: If a severe storm damages your roof, home insurance helps cover the costs.

• Theft or vandalism: If a break-in results in stolen belongings or property damage, home insurance would assist with the replacement or repair.

• Water damage from plumbing or appliance leaks: This includes scenarios like a burst pipe flooding your kitchen (though flood damage from natural disasters often requires separate flood insurance).

Home insurance also provides liability coverage, which protects you if someone is injured on your property or if you accidentally cause damage to someone else’s property.

What is a Home Warranty?

A home warranty, on the other hand, is a service contract that covers the repair or replacement of major systems and appliances in your home due to normal wear and tear. It’s not mandatory but can provide peace of mind, especially for homeowners with older systems or appliances.

Typical items covered under a home warranty policy include:

• HVAC systems: If your air conditioning unit stops working during a heatwave, a home warranty might cover the cost of repairs or a replacement.

• Plumbing systems: Issues like a broken water heater or clogged sewer line may be addressed by your home warranty.

• Kitchen appliances: Items such as refrigerators, ovens, and dishwashers that fail due to normal use can be repaired or replaced under a home warranty.

• Electrical systems: Malfunctions in your home’s wiring or electrical panels may also be covered.

Do You Need Both?

While home insurance and a home warranty serve different purposes, they can complement each other. Home insurance provides broad financial protection against significant risks, while a home warranty helps with the smaller, more frequent issues that come with homeownership.

For example, if a hailstorm damages your roof and your furnace stops working the next day due to age, your home insurance would cover the roof repairs, while your home warranty could address the furnace issue.

Final Thoughts

Choosing the right protection for your home depends on your needs and budget. If you’re unsure, reach out to an expert at 643 Insurance for guidance. We’ll help you understand your options and tailor a plan that provides the right level of protection for your peace of mind.

Have any questions for us? At 643 Insurance, we’re here to help you understand your insurance policy options and ensure you have the protection that you need. Contact us at 643 Insurance today to ensure that you have the right protections in place to cover your home.

Subscribe to our blog and get access to our previous content library!