More than likely if you own a home you’ve heard of homeowners insurance and possibly a home warranty as well. Although very similar and designed to protect your home, they are different in many ways. In this article we will go over some of the basics of both to help you understand the differences.
Home Warranty
With a home warranty you pay a monthly or annual fee for a specified rate on any service calls. A home warranty is a service agreement in place to help pay for any repairs or replacements of covered household appliances and home systems.
For example if an appliance covered by your home warranty breaks down, a technician will be sent out to repair the item according to your documentation. The cost to you would be the service call fee.
What’s covered under a home warranty?
Your home warranty is designed to cover appliances and house hold systems. The majority of home warranty companies offer a few different plans;
- Appliance Plans (washer/dryer, dishwasher, & refrigerator)
- System Plans (HVAC, plumbing, & electrical systems)
- Combination Plan (everything in the appliance and system plans)
Homeowners Insurance
Homeowners insurance or home insurance is insurance designed to protect your property and home. It is an insurance in place to protect you against losses and damages caused by covered perils. If you have a mortgage on your home, more than likely your lender requires you to carry homeowners insurance. Below is some of what is covered by homeowners insurance;
Structure of the home. One of the more basic elements of homeowners insurance is structure protection. This will help to pay cost for damages if you need to repair or rebuild your home. When it comes to detached structures, they are usually covered as well. This includes gazebos, garages, sheds & decks.
Personal belongings. If your furniture, electronics, or other valuables are damaged by a covered peril, this portion of your homeowners insurance will help to pay the costs.
Liability insurance. Liability protection covers you if someone is injured on your property. It will also cover the costs of legal fees and medical expenses.
Additional living expenses. This portion of your homeowners insurance will cover hotel costs, additional expenses for meals and other miscellaneous living expenses. If you are unable to live in your home due to a covered peril, additional living expenses coverage will help pay some of the costs.
What’s covered under a homeowners insurance policy?
It’s important to know what’s actually covered under your homeowners insurance policy. Some of the less known exclusions would be flooding and earthquakes. For floods you would need to look into flood insurance. For earthquakes, please look into earthquake insurance. Below are some of what may be covered under your homeowners insurance policy;
- Fire or lightning
- Windstorm or hail
- Explosion
- Riot or civil commotion
- Damage caused by aircraft
- Damage caused by vehicles
- Smoke
- Vandalism or malicious mischief
- Theft
- Volcanic eruption
- Falling object
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water or steam from a plumbing, HVAC, or automatic fire-protective sprinkler system, or from a household appliance
- Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioner, or an automatic fire-protective system
- Freezing of a plumbing, HVAC, or automatic fire-protective sprinkler system, or of a household appliance
- Sudden and accidental damage from an artificially generated electrical current
When it comes to protecting your home, homeowners insurance is your best option. If you are in California and would like to get a fast free homeowners insurance quote, give us a call! 916 313 6100