(Newswire.net — June 1, 2022) — When you purchase a new property, you are likely to hear words like warranty and insurance bandied about as if you should know what they are and what they mean. However, whilst they are often mentioned together, they are very different. When you become a homeowner, you need to know the difference between home warranties and home insurance to ensure that you are fully protected. In order to get the best deal that suits you, you need to research home warranty coverage options and insurance choices so that you can see which is right for you.
What is home insurance?
Home insurance or homeowners’ insurance pays for any damages that affect the interior and exterior of the home caused by acts of God such as fires and weather damage. It can also cover burglaries and any vandalism that you may experience. If your house is damaged or destroyed, then your insurance will help you replace and rebuild your home. To give an example, if a tree were to fall onto your home and go through the roof then your policy will help you replace things that are damaged. However, you are not protected if the appliance is just poorly maintained or too old.
What is a home warranty?
A home warranty covers any cost of repairs that your appliances require as well as any replacements of these appliances or systems if you need them. However, they only do this if the damage is through general wear and tear or old age. Appliances that you can protect include washing machines, ovens, stoves, or even your hot water heater. Plans are often variable and can include many different things or exclude others. It is often down to you and your salesperson to decide which is best for you.
Do you need to buy them?
Usually, when you buy a home, your lender will require you to have at least a basic home insurance covering your property as part of your mortgage agreement. From your lender’s perspective, home insurance reduces the risk that you will not be able to make the payment should an accident or emergency occur. Typically, it will be necessary for you to purchase this.
A home warranty on the other hand is completely optional. Your home warranty is tied to your home and so can be transferred from one owner to the next, unlike your home insurance. It can provide an added incentive to potential purchasers of your property if you are selling your home. If you are buying a home, you can actually ask the sellers to add a home warranty to the home so that you know you are covered when you move in.
Knowing the difference
When you are buying a home there is often a lot going on and it can become easy to get lost in all of the jargon. Don’t let yourself be fooled into buying something you don’t need or that will be no good for you. Ask around and find out if any policies suit you before diving in.