Knowing the differences between a home warranty and homeowner’s insurance can be a little confusing. But it’s important to understand where one begins and the other ends to make sure you have the coverage you need. Following is how to know the difference between a home warranty and homeowner’s insurance:
In a nutshell, a home warranty covers the repair or replacement of a home’s major systems and appliances. Homeowner’s insurance, on the other hand, may cover a home’s structure and contents in the case of damage or theft.
A HOME WARRANTY TYPICALLY COVERS THE FOLLOWING:
HVAC – Even with proper maintenance, an HVAC system can wear out. A home warranty covers expensive repairs and replacements for these systems.
APPLIANCES – Is your oven cold? Your refrigerator warm? A home warranty covers those large appliances you depend on every day.
ELECTRICAL SYSTEMS – A home warranty covers your home’s electrical system, including its wiring and switches.
PLUMBING SYSTEM – A home warranty will cover the repair of your home’s plumbing system. (Your home warranty won’t cover water damage from your plumbing problems but homeowner’s insurance can.)
(Click here for more details on home warranty coverage.)
HOMEOWNER’S INSURANCE TYPICALLY COVERS THE FOLLOWING:
WEATHER-RELATED DAMAGE – Damage caused by storms, wind, hail and rain should be covered by homeowner’s insurance. (Typically, damage caused by flooding isn’t covered unless there is flood damage insurance included.)
FIRE-RELATED DAMAGE – Homeowner’s insurance can pay for the damage caused by a fire, and also cover the belongings damaged in the fire.
BELONGINGS – Homeowner’s insurance may cover the loss of a homeowner’s belongings due to theft or damage.
LEAKS – Damage caused by a leak should be covered by homeowner’s insurance, but the repair or replacement of the toilet would not be covered. In this case, a homeowner would have to pay for it if they don’t have a home warranty.
The bottom line is that comprehensive home coverage includes both homeowner’s insurance and a home warranty.