How is a Home Warranty Different from Homeowners Insurance?
Homeowners insurance and home warranties are both designed to help safeguard your home, but they’re different, and also offer different types of protection.
A home warranty is an excellent way to supplement a homeowners insurance policy, but a homeowner should consider purchasing both.
What is homeowners insurance?
Homeowners insurance covers loss and damage to your home or belongings caused by certain perils such as fire or flood. Most mortgage lenders require a homeowners insurance policy as a condition of granting the home loan. Homeowners insurance does not typically cover for mechanical failures, so a home warranty can help bridge the gap.
What is a home warranty and how does it work?
A home warranty is a service contract (often yearly and renewable) that can cover the costs associated with common home system and appliance failures. Savvy home sellers and buyers understand the value a home warranty provides both before and after the sale of the home. As we all know, home systems and appliances don’t last forever, and a home warranty plan offers plan holders convenience, budget protection, and peace of mind should something occur. When a covered item breaks, a pre-screened service contractor will visit your home and determine and diagnose the repair or replacement of the item. Home warranties usually cover systems such as heating, air conditioning, plumbing, and appliances like dishwashers, ovens, clothes washers and dryers, refrigerators, and more…all depending on the company you go with and their plans and the options you choose.
What can repairs and replacements cost without home warranty protection?
Breakdowns happen when you least expect them, and the cost of repairing or replacing systems and appliances in the home can devastate a budget. You can potentially avoid huge, inconvenient, expenses, and save hundreds to thousands each year with a home warranty.
Examples of approximate costs without a home warranty:
Air Conditioner: $900 to $3,250
Plumbing System: $475 to $1,200
Heating System: $800 to $3,000
Electrical System: $400 to $1,650
Oven/Range: $1,250 to $3,500
Water Heater: $900 to $1,750
Homeowners insurance and home warranties work together
Let’s say a dishwasher leaks in your kitchen, all over your new hardwood floors. While homeowners insurance may cover costs related to the water damage, a home warranty would cover the dishwasher breakdown.
Having both homeowners insurance and a home warranty is a great idea. They can work in tandem to ensure coverage for the home and belongings within, including the home’s systems and appliances. Combined, both types of coverages offer homeowners more peace of mind and invaluable budget protection when covered home system and appliance breakdowns happen.
To find out about several of the top rated home warranties, go here. And if you’d like any referrals to local home warranty companies we recommend, let us know.
As always, if you’re thinking of listing your home, or if you don’t own a home, condo or similar, and are ready to buy, let me know so I can help you take advantage of current market conditions, as well as all the resources and referrals I have from my many years of success in the industry. As a 10 year Five Star Real Estate Agent, knowing that no matter what is happening in the economy, and especially now, you need a professional real estate broker as your ally, and you’ll be in great hands with my team and me!
Please reach out, I’m here to assist and help you #moveforward,
Teresa Catania, Broker
West + Main Homes
West + Main Homes Oregon
Bend Oregon | Central Oregon | Portland Oregon
503-740-3293
teresa@teresacatania.com