What's the difference between home warranty and home insurance?

A home warranty covers the service, repair, or replacement of your home's main systems and appliances for a typical one-year period. This type of guarantee is issued by a home warranty company and is different from home insurance, which provides financial protection in the event of a disaster or accident. There are other parts of the home that are covered by the home warranty, but each specific plan is a little different. The fundamental difference between warranty and insurance is that insurance covers unexpected events that cause damage, while guarantees cover expected events, such as aging and the definitive breakdown of appliances and systems.

Home warranties help cover costs when an appliance or a important home system breaks down. Home insurance, on the other hand, covers your home and personal belongings against theft and other hazards, and also provides personal liability coverage. If you have a mortgage, your lender may require a home insurance policy. Of course, even if it's not mandatory, it makes financial sense to protect your investment with a good insurance policy.

While both policies are designed to protect your home, each offers different types of protection. That's why having both is often a good idea. While a home insurance policy covers damage to your home, it doesn't cover things like equipment and appliances breaking down. A home warranty means you can repair or replace items at a lower out-of-pocket cost.

Home guarantees and home insurance share a similar structure, but offer different benefits. In both cases, you'll pay a fee to your provider in exchange for protecting your home and the things in it. Your home warranty covers you primarily for normal wear and tear on certain major appliances and systems. On the other hand, home insurance covers damage to the house and its contents due to covered hazards.

If you own a home or are planning to buy one, you may be wondering what the difference is between a home warranty and home insurance. home warranty companies generally have different plans available that provide coverage for all or some of these items. While home warranties are optional, they can provide an additional layer of protection and greater peace of mind. While the customer experience with both warranty and home insurance is similar, there are some important differences.

While individual appliances may initially be covered by manufacturers' warranties, these only last for a predetermined period of time. On the other hand, the law doesn't even require home guarantees, so the choice is always up to you. Let's see what a home guarantee is, what is home insurance and what are the differences between the two. Every homeowner must understand the differences between home guarantees and home insurance for many reasons.

Home warranties look like a similar product, after all, almost everyone has been offered an extended warranty for an appliance or a car, but the protection provided by a home warranty has a different scope than the protection offered by a homeowners insurance policy. A home warranty and home insurance provide protection in different parts of a home and, together, can protect a homeowner's budget from costly repairs when they inevitably arise.

Lynette Roen
Lynette Roen

Avid travel nerd. Award-winning tv practitioner. Hardcore music evangelist. Hipster-friendly web nerd. Incurable music advocate. General tv practitioner.

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