Homeowners Insurance vs. Home Warranty
Homeowners insurance, combined with flood insurance, and a home warranty can all provide peace of mind and protection against financial harm due to something unexpected happening to your home. They differ when it comes to the type of protection they offer.
Homeowners and flood insurance typically apply when accidental damage occurs to your home and belongings due to theft, storms, fires, floods and natural disasters (depending on the type of policy).
Home service agreements, also known as home warranties, cover the cost of repairs or replacements for a number of your home systems and appliances. The warranty guarantees to the homeowner that if something that is covered by the home warranty plan stops working or breaks down then it will be repaired or replaced by the warranty company, subject to the terms and conditions of the contract. A home protection plan typically covers mechanical failures or breakdowns due to normal wear and tear of your home appliances or major systems (heat/air conditioning, plumbing, electric, kitchen appliances, etc.) depending upon the plan and options that you choose.
Homeowners and flood insurance usually cover damages caused by such perils as:
- Theft and vandalism
- Tornadoes, hurricanes or earthquakes
- Floods, fires, windstorms, lightning, hail or falling objects like a tree
Additionally, homeowners insurance may cover:
- Personal property
- Liability claims from third-party injuries that take place on your property
- Living expenses if your home is deemed uninhabitable
Home warranties typically cover major appliances and systems like:
- Central air conditioning and heating
- Interior electrical
- Water heater
- Washer and Dryer
- Garage door opener
- Ceiling fans
- Plus more...