Home Insurance vs. Home Warranty: A Complete Guide

As a homeowner, the safety of your family, pets, and belongings matters as much as that of the house. When investing in an insurance policy, make sure you choose one that addresses the components of your home holistically. It’ll help you save up on unexpected expenses in case of a misfortunate event and give you peace of mind.

If you’re confused between a home warranty and home insurance, the following guide may help:

What Is Home Warranty?

A home warranty is more like a service contract or a replacement contract that helps you finance any necessary repairs in your home. A home warranty is similar to a manufacturer warranty. The only difference is that the manufacturer warranty covers specific appliances, whereas home insurance applies to multiple appliances. You can apply for extensive coverage to include all the appliances in the house, depending on your budget and requirements.

A home warranty covers a fixed number of aspects in the home that are predefined in the plan. Instead of paying you a lump-sum amount, the warranty splits up the costs into fixed monthly premiums and a deductible.

What Is Home Insurance?

Home insurance, on the other hand, helps pay for the damages that happen to the house itself. Such incidents are called perils and may include theft, vandalism, floods, earthquakes, burglaries, and fire.

Your homeowners insurance policy also provides personal liability insurance. This means that the policy will also help pay for the medical expenses, legal fees, and damages if someone else gets injured on your property. Homeowners insurance may also offer protection for your valuable personal possessions such as expensive watches, jewelry, and furs.

Which Is A Better Option?

Although home warranty helps you pay for unanticipated repair costs, home insurance is a more viable option. Your home warranty won’t cover all your appliances. More importantly, it won’t cover damage from natural disasters and fire accidents. That’s where home insurance provides coverage.

Similarly, if your HVAC system breaks down or starts malfunctioning, your homeowner insurance won’t be of any help. It’ll only pay for the losses if the HVAC system is damaged as a result of a covered risk (or a peril).

However, in many cases, homeowner’s insurance is mandatory, whereas a home warranty is not. Most financial institutions require you to have basic homeowner insurance in order to qualify for mortgage and bank loans.

Ideally, it’s advisable to have both homeowner insurance and home warranty to be prepared for all sorts of unforeseen circumstances, including sudden appliance breakdowns or fire incidents.

If you’re based in Indian Orchard, MA and are in search of a reliable home insurance service, get in touch with Western Mass Auto Insurance. Our insurance agents Indian orchard are well-versed and experienced in closing all forms of insurance deals.