Home Warranty vs. Home Insurance

You may ask yourself is there a difference between a home warranty and home insurance. The answer is yes. There is a difference, and it is a big difference. Home insurance is required for your home, while a home warranty isn't required and isn't always necessary.

What Is a Home Warranty?

A home warranty offers protection for your major appliances, plumbing, and electrical wiring. These warranties will cover the cost of repairing or replacing major household essentials if they break down.

How a Home Warranty Works

A warranty company already has contracts with different service venders, so when a covered item breaks down you will need to contact your warranty company. They will then contact a service repairman to come to your home and repair the item. The repairman will fix the item or recommend that it be replaced. The service repairman will bill your warranty company directly.

What a Home Warranty Costs

A home warranty can range in price from as little as $200 to as much as $700 a year, depending on the amount of coverage you receive. You will also have to pay a service fee anytime that a repairman is at your home. This fee generally ranges from $25 to $100.

Do You Need a Home Warranty?

Home warranties are becoming popular in these hard economic times, but before you purchase one make sure it is the right decision for you. If you are trying to sell your house, a home warranty will be a good investment. Many buyers like the protection that is offered with a warranty and may purchase your home just because they have that security for one year. If you have an older home and your appliances are getting older, a warranty may good idea for you.

How to Choose a Home Warranty

When you are thinking of investing in a home warranty, be sure to shop around. When you are getting price quotes, ask to look over a sample policy. Remember to read the policy in its entirety, including the fine print.

What Is Home Insurance? 

When you purchase a home you are required, by your lender, to carry homeowners insurance on your home. A home insurance policy has two basic areas of protection: it covers your home in the event that it is damaged and offers you liability protection from lawsuits.

What Home Insurance Covers

Home insurance offers you protection for damage to your home. This damage could be from a fire, theft, vandalism, or certain natural disasters. Not only does it cover your house but it also covers your personal items and gives you liability protection. Liability insurance will protect you from lawsuits in the event that someone is injured on your property. Home insurance will only insure your personal items if they are stolen or ruined in a disaster, it will not repair or replace them if they are broken.

What Home Insurance Costs

The price of home insurance varies greatly. Many things are taken into consideration, including the value of your home and its contents, the loan amount on your home, the location of your home, and the amount of your deductable.

How to Choose Home Insurance

As with any type of insurance, it is always a good idea to shop around and compare prices and benefits. A great place to start is with your current car insurance carrier, since most insurance companies will offer you a multi -policy discount. Make sure you read the policy before writing a check and ask any questions you may have.

Guest post from Bailey Harris. Bailey enjoys writing about real estate, insurance, finance, and related topics.