Home warranty vs. home insurance: What you should know

As a homeowner, it’s always a good idea to protect your home from expensive damage or loss, whether it’s caused by extreme weather or daily wear and tear. Investing in both home insurance and a home warranty plan is essential, as they cover different things. 

Why do you need both plans and how do they differ?  

Home insurance policies
The main difference between a home warranty and home insurance policy is what they cover. Home insurance is often mandatory when homeowners buy a new house. The bank will usually require you to purchase a policy before issuing a mortgage and keep it for the length of the mortgage.

Home insurance covers four primary areas of the home, including personal property and general liability if someone were to be injured on your property. In addition to theft, home insurance policies will only cover costs for damages caused by perils like fires, floods and other natural disasters. 

If your basement were to flood due to a storm or an earthquake were to ruin the structure of your home, an insurance adjuster would come to your house and fill out a claim for repair of any damaged belongings. After the claim is approved, your insurance company issues you a payment after subtracting the amount of your deductible from the total balance to cover the cost of the repair. 

Home warranty plan
While home insurance policies are usually required for homeowners, home warranties are not mandatory. However, because insurance policies don’t cover costs when home appliances and systems break down from normal wear and tear, you can save yourself a lot of trouble and money by investing in a warranty plan. Unfortunately, things like your A/C and washing machine breakdown –and when they do they’re expensive to fix.

A home warranty is a plan to help cover the expense of repairing or replacing appliances and home systems when they fail due to normal, everyday use. Warranties generally cover essential items in the home such as your plumbing and electrical systems, major appliances, HVAC system and washer and dryer. 

“You can choose the deductible that works best for you.”

Similar to home insurance, there are different pricing options available. You can choose the deductible that works best for you. When something breaks down, simply file a claim online. AMEZones will connect you with a pre-screened service provider in your area who will visit your home to diagnose and remedy the problem. Your deductible should cover the repair cost, even if the item needs to be replaced.  

While a home warranty plan and your insurance policy can protect your home in different ways, both give you peace of mind that your home and budget are taken care of when even the most unexpected problems arise.