It’s quite common for people, primarily home buyers, to offer home warranty coverage when they buy a new house. Though both home warranties and insurance can give you full coverage when something unfortunate events come up, these two protection features are different from each other. But one thing is for sure: they can both give you peace of mind.
For example, you’ve decided to buy a new home after seeing an advertisement about houses for sale prescot since most of the houses there are extravagant and glamorous. Then during the process of acquiring the house, you’ll automatically have a home insurance policy. But this policy is not a home warranty.
Whether you’re a first time home buyer, second, or third time, a condo, or selling your house, you’re required to learn about the benefits of a home warranty. Doing this can help you decide if you want to purchase another one as a top-up to your home insurance.
Home Warranty: What Is It?
It is a product that’s meant to protect and cover several aspects of the house. It can also assist you financially if you need some home repairs. A home warranty is like a service or a replacement contract in your home.
Meaning, if you have a home warranty on your house, then you have service assistance if you need to do expensive repairs. In some cases, you may also replace a specified items contract in your home. It can be a more significant help, especially for first-time homeowners.
Home warranties apply to a variety of items in your home, depending on the contract. For instance, some home warranties can cover everything from HVAC systems, fancy appliances and equipment, motors, and plumbing, depending on the coverage protections. You may also choose basic home warranty coverage depending on your needs, budgets, and the risk they think you might have in your home.
Advantages and Disadvantages of Home Warranty
Like what was mention above, home warranties play an essential role in protecting your house’s appliances and your financials. Though there are some few disadvantages to consider. Therefore, you need to make sure that you’re knowledgeable enough before buying a policy.
Advantages of Home Warranty
- Can provide peace of mind
- Can save you from unanticipated repair costs
- Gives set premiums and large deductible for repair costs
- Best for first-time homeowners who are not familiar with appliance break-downs
- Gives protection in most significant appliances as they age, compared to home insurance
Disadvantages of Home Warranty
- Limited coverage
- Doesn’t cover old and other devices that weren’t maintained
- Needs you to pay premiums all year
- Doesn’t cover damages from fire and other disasters
Difference Between Home Warranty and Home Insurance
Both home warranties and home insurance can cover unexpected happenings in your home. The difference is that in your insurance policy, there are several exclusions about a mechanical breakdown. For example, if your washing machine breaks down or your air conditioning system fails, the replacement of the items are not to cover. Though the damages are cover in the form of a claim like, for example, water damage.
While on the other hand, a home warranty is created to cover several things that are not usually covered by home insurance. Because of these benefits, many homebuyers are attracted to buy this kind of policy.