Home Warranty vs. Home Insurance

When someone buys a home, they are putting in an investment into their own or their family’s future. As a homeowner, it is important to be able to maintain this investment by protecting the house and the possessions inside. This maintenance can be accomplished through tools such as home warranty and home insurance. Understanding the dichotomy between the two and how to use each to protect your home is important if you are looking for the strongest protection of your home.

What’s the Difference?

Homeowner warranties protect home appliances and systems from breakdowns caused by the normal wear and tear they go through during the owner’s everyday life. If the garbage disposal stops working, a home warranty may cover it as long as it is covered under the policy.

On the other hand, homeowner insurance protects the house and its contents from atypical phenomenon such as flooding, fire, or storms. If the house catches fire, home insurance will help pay to replace the house and its contents. Knowing and understanding which type of policy applies to your specific situation will better enable you to protect what you own.

Why Buy a Home Warranty Policy

The most important fact to understand about home warranty is that it comes into play through the expected wear and tear of regular use of the appliance/system. It does not protect from the unusual events that are covered by insurance.

However, this means that a homeowner warranty is more universally applicable. Appliances break. Systems stop working through no direct fault of the homeowner. These types of occurrences are a part of regular life, and these are what a home warranty covers. If one day your electrical system stops working because it got worn out, your applicable home warranty can cover that. Dishwasher breaks? The warranty can cover that. Through a homeowner warranty, a homeowner is protecting themselves and their finances from the appliances and systems giving out due to regular expected use.

Why Buy a Home Insurance Policy

Home insurance policies, while only applicable in specific circumstances, give a greater amount of protection. An inch of floodwater can cause extreme damage to the house and the belongings found inside. The insurance policy is replacing all sorts of items damaged by the circumstance. Homeowner insurance protects a homeowner and their finances from the worst circumstances that could potentially cost them everything in their home.

Conclusion

Both a home warranty policy and home insurance policy are important for the maintaining of your home. Whether it be through daily use or a major peril, a combination of these policies can extend your protection to cover nearly all circumstances. Both of these types of policies are designed to protect homeowners from the unexpected.

While it is always important for each homeowner to understand the specific limitations that these types of policies have, that does not lower the value and importance that these types of policies bring. If you do not have one or both of these types of protection policies for your home, consult your local agent to figure out a policy that works best for your home.

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