02 Jul 2019
homeowners embracing in front of their house

Learn how home insurance and warranties differ.

If you are looking into ways to protect your home, you have likely learned about home insurance and home warranties.  While these are both ways to cover your home, they do so in different ways.  Here’s what differentiates home insurance policies from home warranties.

  • Home Insurance

In the most basic terms, a home insurance policy is designed to cover accidental damage to your home and belongings.  Typically, homeowners insurance policies will include a list of covered perils, such as fires, storms, theft, vandalism, and certain natural disasters.  There are four main types of coverage included in standard home policies: dwelling, personal property, personal liability, and loss of use.  It’s also important to note that home insurance policies include a deductible; the amount that the policyholder must pay towards a claim before they can access their insurance coverage.

When you purchase a home, your mortgage lender will require you to secure some minimum level of home insurance coverage.  You also have the ability to customize your homeowners insurance policy by adding other forms of coverage and adjusting your coverage limits and deductibles.  Adjusting your coverage options, coverage limits, and deductible amounts will affect the cost of your premium.

  • Home Warranty

A home warranty is a service contract that covers the repair or replacement of certain home systems and appliances that may fail due to age, wear and tear, or some other type of internal malfunction.  Oftentimes, home warranties provide coverage for your home’s HVAC, electrical system, plumbing, kitchen appliances, and washer and dryer.  A home warranty is an optional form of coverage that is not required by mortgage lenders.

Please keep in mind that home warranties will only repair or replace the systems and appliances that are specifically listed in the contract.  Additionally, you will not have coverage if a listed system breaks down due to external issues such as fire, storms, and so on.  Instead, warranties only provide coverage for the damages caused by mechanical, internal issues.

These are the main differences between home insurance and home warranties.  Do you have additional questions about these home coverage options?  If so, then contact the experts at Patterson & Associates in Richardson, Texas.  We are ready to assist you with all your coverage needs today.