Learn How to Differentiate Home Insurance from Home Warranties

The difference between home insurance and home warranty coverage.

If you are a homeowner, then you probably have the right homeowners insurance in Carrollton, Texas to protect your property, belongings, and loved ones.  However, you might be looking for additional forms of home coverage.  One of the most common coverage options out there is home warranties.  While insurance and warranties sound similar, they actually offer coverage in very different ways. Here’s what separates homeowners insurance from warranties.

  • What is Home Insurance?

In the most basic terms, a home insurance policy is designed to cover accidental damage to your home and belongings.  Typically, homeowners insurance policies will include a list of covered perils, such as fires, storms, theft, vandalism, and certain natural disasters.  There are four main types of coverage included in standard home policies: dwelling, personal property, personal liability, and loss of use. 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.

  • What is a Home Warranty?

A home warranty is a service contract that covers the repair or replacement of certain home systems of 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.

So, how does a home warranty work?  Say, for example, that your HVAC system stops working.  In this case, a licensed and pre-approved technician will come to your home to assess the issue.  If the technician determines that the system stopped working due to an issue covered in your service contract, then they will make the necessary repairs or replace the broken parts completely.  You will pay a small portion of the repair costs (usually around $125), and your warranty will cover the rest.

Please keep in mind that home warranties will only 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.

This is what you need to know about home insurance and home warranties.  Do you have additional questions regarding your homeowners insurance in Carrollton, Texas?  If so, then contact the experts at Mike Leonard Insurance Agency.  Our dedicated team is eager to find you the right coverage from one of our many carriers including: Kemper, MetLife, Nationwide, Travelers, The Hartford, Safeco Insurance, Progressive, and American Strategic Insurance.