A homeowner’s insurance is perhaps the highest level of coverage you can get to protect your property. However, while it covers many unforeseen liabilities and expenses associated with homeownership, this type of insurance is mostly reserved for fire, burglaries, or natural disasters. If you want to extend the protection to expensive home appliances or built-in systems, then your monthly payments and deductibles will increase significantly.
So, what can you do if you want full coverage for your home and everything inside without paying over the top? How can you get your insurance company to pay for a heater replacement after the old one deteriorates due to wear and tear? By getting a home warranty. In this article, we explore the differences between a home warranty and a homeowner insurance, and provide some tips on how to combine both effectively.
What is covered under homeowner insurance?
The usual homeowner insurance plan protects the structure of a home and the belongings inside the building. Some plans also include personal property and injury liability, as long as the amount is under a certain limit. Now, many of the items covered under this policy will intersect with what’s covered by a home warranty. However, this protection only comes into play if a catastrophic event occurs.
In the event of such a catastrophic event, the insurance company will cover the cost of rebuilding the house and replacing items damaged – as outlined in the policy. This may include smoke damage, theft, lightning, wind, and other weather damages. A homeowner insurance may also pay for your hotel bills or any additional living expenses you incur if your home is found inhabitable after the event. Some comprehensive plans will cover medical expenses for you or any guests in your home.
On the other hand, a homeowner’s insurance doesn’t offer protection against events – like floods and earthquakes – which are considered as “acts of God.” Furthermore, plans are subject to coverage gaps, meaning the provider will only pay as much as is outlined in the agreement with other expenses left to the homeowner.
What does a home warranty plan cover?
A home warranty is best described as a contract that isn’t really insurance but works like one. This type of policy is regulated by an independent governing body of the state in which it was issued. It typically covers the replacement or repair of items stated in the contract, and this may include kitchen appliances, electrical systems, water heater, and so on. Home warranties work best for homeowners who don’t have enough saved up to cover the costs of fixing or replacing expensive household appliances.
Exactly what a home warranty covers will vary based on the provider, but there are generally two levels of coverage: a basic plan and a comprehensive one. The basic plan offers protection for either built-in systems or home appliances. Conversely, the comprehensive plan covers a combination of both – it’s important to read the terms before signing any home warranty deal.
Appliances you can place in a home warranty agreement include home devices like refrigerators, washer/dryers, dishwashers, garbage disposals, microwaves, and oven/stoves. Built-in systems like air conditioners, plumbing and electrical systems, water heaters, home heating systems, and ductwork may also be included. Customized add-ons like coverage for a pool, spa, well sump, central vacuum, and roof leakage may also be offered by some providers.
Final notes
As a homeowner, you are responsible for everything on your property. If anything gets damaged or stolen, you have to replace it – no matter how expensive. Now, some insurance providers make it so that you can offset the cost of any potential loss in the future by paying a small amount every month. If done right, combining a homeowners policy with a home warranty can provide a high level of coverage.
If you’d like to consult with an insurance specialist for your homeowner insurance and home warranty plans, we have an expert available to answer all your questions and provide advice that’s tailored to your needs. To schedule a free consultation now, follow this link to book an appointment.
