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Home Warranty vs. Homeowner Insurance; What Is the Difference?

Home Warranty vs. Homeowner Insurance; What Is the Difference?

From childhood, nearly everyone dreams of owning a home. Your home is a great investment. Choosing what to purchase is a personal decision while protecting what you have acquired is a wise decision. Nothing hurts like investing so much in a home appliance then ‘losing’ it without reaping its optimum benefits. It is emotionally draining.

Different policies have enabled homeowners be at peace knowing their items are covered irrespective of eventualities. Home warranty and homeowner insurance policies turn out to be the most common ones. Apparently, many people tend to confuse the two. It isn’t just the first-time homeowners who are stuck in this circle of confusion. Perennial homeowners seem to be languishing in the same dungeon as well. We’ll pull you out, just this once.

What does homeowner insurance entail?

This is a contract that pays for losses resulting from accidental damage caused by storms, fires, natural disasters and theft. In essence, the policy covers four main aspects of your home:

  • Personal property
  • Home interior
  • Exterior of your property
  • General liabilities arising from injuries while on your property

In most cases, banks demand home insurance policies before issuing mortgages. The policy is renewable on an annual basis and can cost $300-$1000. Typically, home insurance policies offer deductibles. You will foot this bill in case of claims. The policy provider will take care of the remaining charges.

In case a plumbing issue such as a pipe outburst, for instance, an insurance adjuster will fill a claim report. Upon approval of the claim, the insurance company will ‘cut’ the deductible then handle the balance. Deductibles can come handy in lowering annual policy premiums.

Home warranty details

A home warranty is a service contract that covers the repair and replacement of system components. The failure of such systems might stem from normal wear and tear. The cover can include essential components such as HVAC, kitchen, plumbing and other common appliances. Premium home warranty polices allow for coverage of larger systems like spas and pools.

It is notable that home warranties are not mandatory for those taking mortgages. Actually, it is purely optional. It is an annual contract, one you can renew if you feel the need to. A typical example is a HVAC system breakdown. The breakdown will be covered under the agreed terms and conditions of the policy. The service contractor will handle the repairs. If need be, there will be replacement. Many Ohio home warranty policies include deductibles, just like insurance covers. To be honest, wear and tear will eventually happen to appliances. Things break as well. Home warranty plans keep you covered in such cases.

Taking up a home insurance policy might be mandatory but home warranty products are purely optional. You need to take your time before choosing a home warranty product. Consider the small details. Where necessary, seek advice from policyholders. For the best experience, complement home insurance policies with a home warranty plan. Regardless of what happens to your appliances and home, you will be covered! Simply put, you can have your own cake and eat it.


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