How do home insurance policies and home warranties differ?
As a homeowner, securing coverage for your home is probably one of the first things on your mind. Two of the most common coverage options include home insurance and warranties. While these coverage offerings may seem similar, there are many differences between the two. Here's how home insurance policies and home warranties differ.
A home insurance policy is designed to cover accidental damage to your home and belongings and protect your personal liability. There are four main types of coverage included in standard home policies: dwelling, personal property, personal liability, and loss of use. Typically, homeowners insurance policies will include a list of covered perils, such as fires, storms, theft, vandalism, and certain natural disasters. Should your home sustain damage due to one of these issues, your home insurance policy will offer you coverage for repairs.
It's also important to note that home insurance policies include a deductible; the amount that the policyholder must pay towards a claim before they can access their insurance coverage. When you purchase a home, your mortgage lender will require you to secure some minimum level of home insurance coverage. You also have the ability to customize your homeowners insurance policy by adding other forms of coverage and adjusting your coverage limits and deductibles. Adjusting your coverage options, coverage limits, and deductible amounts will all affect the cost of your premium.
A home warranty is a service contract that covers the repair or replacement of certain home systems or appliances that may fail due to age, wear and tear, or some other type of internal malfunction. Oftentimes, home warranties provide coverage for your home's HVAC, electrical system, plumbing, kitchen appliances, and washer and dryer. Home warranties are an optional form of coverage that is not required by mortgage lenders.
Home warranties will only offer coverage to repair or replace the systems and appliances that are specifically listed in the contract. Additionally, you will not have coverage if a listed system breaks down due to external issues such as fire, storms, and so on. Instead, warranties only provide coverage for the damages caused by mechanical, internal issues.
Here are some of the ways in which home insurance policies and home warranties differ. Do you have more questions regarding your home coverage needs? If so, then contact
the experts at Fuller Insurance Agency
in Southern California. We are ready to assist you with your homeowners insurance today.