When purchasing your first house, you're probably more concerned with the perfect wall art than home warranties and insurance. You might not have heard the term "home warranty," but we can assure you that it is essential.
A home warranty company will offer various plans that cover systems and appliances. With the purchase of an add-on, your central air conditioning will have full coverage too.
Many homeowners know that home insurance is a must; it covers a home's structure and belongings in some cases like fires, floods, or tornadoes. You may think that the two are the same, and although they are similar, the type of protection offered differs.
Understanding what each plan protects will help you determine whether you need both.
What Is A Home Warranty?
A home warranty is a contract of service that assists in paying for repairs and replacements for covered domestic appliances and systems. You get a fixed fee on service calls in exchange for a monthly or annual fee.
When an appliance covered by your warranty plan breaks, your home warranty company will dispatch a technician to diagnose, repair, or replace the device. You will only need to pay the service fee.
These types of plans do come with appliance limits and annual claim limitations. There will be some things your home warranty plan does not cover, including garage doors, windows, walls, and doors.
As with most warranties, you must keep some conditions to cover your appliances. These necessities generally include regularly scheduled maintenance of your devices and systems. Although every company is different, this requirement is a standard.
What Is Home Insurance?
Wind, fire, vandalism, hail, or theft are examples of known risks covered by homeowners insurance. More comprehensive home insurance policies, known as "all-risk," go beyond primary dangers and contain fewer exclusions.
The home's structure and personal belongings are covered in typical insurance policies. In addition, you should receive liability protection which protects you against lawsuits from injuries, and your insurance policy will cover additional living expenses if your home is uninhabitable.
Homeowner insurance is mandatory when you have a mortgage, while a home warranty is a choice. Banks should ensure that properties mortgaged by them are adequately insured against fire, water damage, and other unexpected events that cause harm or destruction to the property.
Do You Need Both?
It may not be required by law to have a home warranty plan, but it does protect your assets. It makes sense financially to protect your assets in any way you can, and your home is one of your most significant investments.
By reading the fine print, you know precisely what your home warranty or insurance policy covers. If it does not meet your demands or your budget, look for another company that does. In that case, you won't be surprised if something goes wrong.
If your home has new appliances, you might not need to go the extra mile with a home warranty. A higher level of protection will give you more peace of mind and allow you to sleep better at night.