When purchasing a new home, it’s important to do in-depth research on all facets of the homebuying process. One thing you’ll need to understand is how to best protect yourself and your investment if anything were to go wrong. Check out the information on the difference between a home warranty and home insurance below to educate yourself on your options.
A home warranty is designed to cover the cost of repairs and replacements of larger appliances and crucial systems in your home that fail or break due to age and wear and tear. This includes, but isn’t limited to, HVAC, electrical, or plumbing components, kitchen appliances, and your washer and dryer. With a home warranty, you are required to pay premiums year-round, even if you do not use it, and it won’t cover damages if appliances were not maintained properly or if the damage is from a fire or other disaster.
Homeowners insurance pays for any accidental damages and loss caused by fire, lightning strikes, windstorms, and hail. Damage from earthquakes and floods isn’t usually covered. It also covers replacing personal property in case of theft or damage and liability if a person gets injured in your home or on your property. According to American Home Shield, the average annual cost of a homeowner’s insurance policy ranges between $300 and $1,000, and the bank usually asks you to obtain a policy before the mortgage is issued. Make sure to keep in mind that each type of coverage in the policy is subject to a limit and, in most cases, you will have to pay a deductible.
I typically recommend that all my buyers get a home warranty, regardless of the home’s age. It’s not a ton of money for serious peace of mind. And if you need a good contact for home insurance, just let me know! Thanks for checking out this quick read on the difference between a home warranty and home insurance. You’re beautiful! Looking for more random diatribes? You’re covered.