When you are first purchasing a home, it may be quite confusing with all the insurance and warranty information that you receive. You may wonder what the difference is between your home warranty coverage, and your home insurance that you are required to get by law. There are several large differences that you can find once you read through your policies and speak with agents of both companies. Here are just a few of the differences you may find once you move in.
Whether you purchased your home warranty, or you received the coverage from the seller, it doesn’t matter as far as the protection provided. You will likely receive the same amount of protection for everything a warranty covers, as many companies will have a general warranty that protects several aspects of your home. You can expect your home insurance to only be purchased by you, as you are going to be the policyholder that pays for and receives the protection for your home. The difference in payment between the two in regards to payment is you are not expected to pay for your home warranty coverage if the seller provided it, but you are required to pay for your home insurance entirely.
The items that are covered are a major difference between insurance and a home warranty. The home warranty has been made to protect appliances that exist within the home, such as the dishwasher, water heater, garbage disposal, furnace, air conditioner, duct work, inside plumbing stoppages, electrical systems, the range and oven, ceiling fans, and telephone wiring. If you were to move into your home and had a home warranty existing, then whenever an appliance broke down you could call the warranty company to fix it for you. Home warranty coverage covers only the inside appliances of your home.
Home insurance provides protection for the appliances of your home, but only in disasters. Fires, earthquakes, vandalism, and theft are all instances when you would call your home insurance provider to pay for your appliances. Home insurance mainly covers the structure of your home and belongings inside in the case when a disaster strikes, including weather-related mishaps.
Insurance is also paid for in a different way than your home warranty coverage when you make a claim. You often have to pay a deductible when you make a claim with your insurance provider, which can be upwards of thousands of dollars. When you make a claim with your home warranty, you will only have to pay a small fee, if any. You can get outside items covered under your home insurance, but you will have to pay for the repairs more in the long run. You can expect to cover both the inside and out of your home when you have both a home warranty and home insurance, as they both will provide comprehensive coverage together.
When you first purchase a home, you can discuss home warranty coverage with the seller to see if they would be willing to provide it for you. You can speak with an insurance agent to set up your homeowner’s insurance policy before you move in. You can then have most of your home protected against the unknown.