Home Warranty vs Home Insurance

Home Warranty vs Home Insurance - Today we're talking about the difference between your homeowners insurance and a home warranty. Hey everyone, welcome back It's Cori your local realtor with RE/MAX CENTRAL and Monmouth CountyDream Homes located right here in Monmouth County New Jersey.

Homeowners insurance and a Home Warranty.  While they are both great protection for you to have they are both extremely different. Let's start off by talking about your homeowners insurance. Homeowners insurance covers accidental damage to your home caused by one of the following reasons:
  • theft
  • storms
  • fires and some natural disasters.

There are4 primary areas that are covered when you're talking about your homeowners insurance. Those are: the interior and exterior of your home, personal property in case of theft, loss or damage, and general liability that can arise when a person is injured or hurt on your property.  Then what exactly is a home warranty.

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Do you need one? How does that work?  A home warranty is a contract that provides for service or
replacements when any of your home's components fail.  There is a big difference between the two.  Your homeowners insurance is basically an insurance policy, Whereas your home warranty is more of a contract that provides service.

A good way to look at it is,  a home warranty is a contract that is meant to help you from over spending when things in your home break, but what exactly does it cover? Coverage does depend on where you live and what type of a plan you picked but generally the items covered are:

  • kitchen appliances
  • water heater
  • furnace
  • air conditioning
  • washer and dryer
  • plumbing system
  • Electrical system, and some policies even include roof leaks.

Keep in mind non electrical items are not covered in a home warranty such as walls, windows or doors. If you have an issue and you need to use your home warranty, what do you do? It's as easy as picking up a phone and calling the company. They will put you in touch with a local service contractor who will set up an appointment to come out and try to diagnose and/or fix the problem.

This is something that everybody will be charged for no matter what plan you end up choosing. It's a service contract fee, and it's usually between 75.00  to 125.00  dollars. The technician will come out to your home and they'll try to fix the problem.  If they feel they need to order parts and they need to come back for a second visit,  you are NOT charged again.

You're only charged that one time for them to come out. So if you're lucky they'll be able to fix your problem on that first day. They do carry a ton of parts in their vans. But there are some cases where they're going to have to order an additional part and they'll come back a few days later.

If the technician gets to your home and there is absolutely no way he can fix the problem....BONUS, You are then going to receive a new item. For example if your hot water heater is covered and it cannot be fixed, you will have someone coming out to install a brand new hot water heater for you!

And that's all included in your yearly cost to hold on to the warranty in the first place. Homeowners insurance is really an insurance policy and a home warranty is basically a service contract. There is a very hot topic about whether or not home warranties are worth it, or are they too expensive? Thank you so much for read my blog.

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