Home Warranty VS Homeowners Insurance

Kathryn PaviaAll Blogs, Home Insurance

We get this question a lot. What is the difference between my homeowners insurance policy and my home warranty? The answer-a LOT!

Simply put, your homeowners insurance policy covers damages and loss due fire, theft, vandalism, or other covered events. It may also cover you in the event someone is injured on your property and wins a legal judgement against you. Don’t worry, we have covered this topic in much more detail in a blog designated to homeowners insurance.

Your home warranty protects your home’s appliances and systems from issues arising due to normal wear and tear. But how exactly does this work and what is covered? Continue reading to learn more.

What exactly does a home warranty cover?

Typically, the items available for coverage under a home warranty include kitchen appliances (think stove, refrigerator, dishwasher, and garbage disposal), clothes washer and dryer, central heating and air conditioning systems, plumbing systems and electrical systems. Keep in mind, the exact items covered are determined by the plan you select and can vary by state.

What is the process?

In the event your washing machine stops working, you would call your home warranty service provider. They will send a qualified contractor to your home to diagnose the problem. There is usually a fee associated with this service call. This fee should be clearly stated in your home warranty contract.

Based on their findings, the appliance/system is repaired or replaced. In many cases, there is a deductible that needs to be paid as well. Make sure you fully understand the terms of your contract.

How much does it cost and is it required?

Plan pricing will vary based on your location, provider and the plan you select. On average, plans cost anywhere from $350-$600 per year. Enhanced plans, that add an item like a swimming pool, can cost an additional $100-$500.

Unlike homeowners insurance, a home warranty is fully optional. If you do purchase one, or one is included in the purchase of a new home, you can renew or opt out when the one year contract ends.

Still have questions or concerns?

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