The Differences Between Home Warranty and Home Insurance

As a homeowner, you may have heard the terms “home warranty” and “home insurance” thrown around, but do you know what they mean and how they differ? Both types of coverage are essential in protecting your home and your finances. And, more often than not, they both provide some form of peace of mind. However, their coverage areas and purposes vary, so it’s crucial to understand the differences to ensure you have the right protection for your home.

This blog section will explore the ins and outs of home warranties and home insurance, explaining what each one covers and how they differ.

Home Warranty 

A home warranty is a service contract that covers the repair or replacement of major home systems and appliances. These warranties are often purchased when buying or selling a home – but can be purchased at any time, as they offer peace of mind to both the buyer and seller that if a covered system or appliance breaks down, it will be repaired or replaced without high out-of-pocket costs.

Home warranty plans typically cover items such as:

• Heating, ventilation, and air conditioning (HVAC) systems
• Electrical systems
• Plumbing systems
• Kitchen appliances (e.g., refrigerator, dishwasher, oven, etc.)
• Washer and dryer
• Water heater
• Garage door opener

Home Insurance

Home insurance, also known as homeowners insurance, is a type of property insurance that covers private residences. It protects homeowners from financial losses caused by unforeseen events, such as natural disasters, theft, vandalism, and accidents.

Home insurance typically covers the following:

• Dwelling coverage: This covers the physical structure of your home, including walls, roof, flooring, and built-in appliances, if it is damaged or destroyed by a covered event.
• Personal property coverage: This covers your personal belongings, such as furniture, clothing, and electronics, if they are damaged or stolen.
• Liability coverage: This protects you if someone is injured on your property or if you accidentally damage someone else’s property.
• Additional living expenses coverage: If your home is uninhabitable due to a covered event, this coverage helps pay for temporary housing and living expenses while your home is being repaired or rebuilt.

The Difference between Home Warranty and Home Insurance

While both home warranties and home insurance offer protection for homeowners, they serve different purposes and cover different aspects of homeownership.

Here are the key differences between the two:

1. Coverage

Home warranties cover the repair or replacement of major home systems and appliances due to normal wear and tear, while home insurance covers the structure of your home, personal belongings, and liability in case of damage, theft, or accidents.

2. Purpose

Home warranties are designed to provide financial protection against unexpected repair or replacement costs of systems and appliances, while home insurance offers comprehensive protection against a wide range of risks and damages to your home and belongings.

3. Claims Process

With a HomeMembership home warranty, you contact your favorite service provider and hire them to do the repair. With home insurance, you file a claim with your insurance company when a covered event occurs, and they will assess the damage and determine the reimbursement amount. 

4. Cost

Home warranties typically cost between $300-$600 per year, plus a service fee (deductible) for each repair or replacement. On the other hand, home insurance costs vary depending on factors such as location, home value, and coverage levels. 

Conclusion

Both home warranties and home insurance are essential for homeowners, but, as you can see, they serve different purposes and cover different aspects of homeownership. A home warranty offers peace of mind that your home’s major systems and appliances will be taken care of if they break down due to normal wear and tear, while home insurance provides comprehensive protection against a wide range of risks and damages.

Regardless, to ensure your home and finances are fully protected, it’s wise to invest in both a home warranty and a home insurance policy. That said, always make sure to get your warranty or insurance from reliable providers to ensure you get the best protection you need for your money.

If you are planning on buying home warranty, trust HomeMembership. We provide a wide array of free and paid home warranty plans! Enjoy the advantages and security of being a member and focus on the things that matter most to you. Contact us now for more details.