As a homeowner, you are always looking for the best ways to protect your house and investment. Two of the most commonly misunderstood strategies are home insurance vs home warranty. Many people often confuse both or believe that they can act as substitutes for each other. However, they are entirely different programs designed to cover different aspects of your home. In this blog post, we will help clear the confusion and highlight the significant differences between home insurance and home warranty.

Home Insurance vs Home Warranty | Coverage

Firstly, a home insurance policy typically covers your home and the items inside it against unforeseeable events such as:

• Fire
• Theft
• Flood
• Natural disasters.

This means that in case of any damage or loss, your policy will cover the repair or even replacement of all the affected items. In contrast, a home warranty typically covers home systems and appliances, including your plumbing, electrical, heating, and cooling systems. It operates more like a service contract, where the warranty company provides repair or replacement services for covered items when they malfunction due to normal usage.

Home Insurance vs Home Warranty | Price Points

Secondly, the price points for both policies differ greatly. Home insurance policies can be more expensive and involve higher deductibles. This can depend on factors such as the location of your home and the extent of the coverage you require. Home warranties are often less expensive than home insurance and usually have lower deductibles. A home insurance policy is typically a contractual obligation that lasts for one year and is renewable annually. A home warranty is often offered as a subscription service, and the term can vary from three months to one year.

Home Insurance vs Home Warranty | Filing A Claim

Thirdly, the process for filing a claim under either program is entirely different. When you want to make a claim under your home insurance policy, you first need to pay a deductible, file a claim with your insurance carrier, and wait for an adjustment professional to estimate the repair or replacement costs. On the other hand, when a covered appliance or system fails and you have a home warranty, you need to contact the warranty company and pay a service fee, which is considerably smaller than a deductible.

Home Insurance vs Home Warranty | Coverage

Fourthly, the coverage provided by both policies differs in their exclusions. Home insurance policies have exclusions based on certain factors such as the cause of the loss, where the damage occurred, or the age of the damaged items. Home warranties, on the other hand, have exclusions that define the items and systems covered, as well as the conditions that the breakdown or damage must meet for the warranty to become effective. For instance, if your home’s electrical system is not in compliance with local building codes, it might not be covered by your home warranty.

Home Insurance vs Home Warranty | Consider Both Policies

Finally, it is crucial to understand that home insurance and home warranty cannot substitute each other. You may find out that you will usually need them both. A home insurance policy covers issues such as damage or loss resulting from natural disasters, theft, and other unexpected events, while a home warranty takes care of normal wear and tear on your home systems and appliances. You need both to ensure that your home remains protected at all times.

In conclusion, home insurance and home warranty are vital programs that every homeowner should consider. Although both policies cover different aspects of your home, they are essential for ensuring that you are not financially strained by unexpected events. Understanding the differences between the two can help you choose the right programs that keep your mind at ease by protecting your home and investment. Always remember that a home insurance policy is not a home warranty, and a home warranty is not a home insurance policy.

If you would like to learn more about a home insurance policy, contact your local Greenville insurance team!

Disclaimer: This article is not expert advice. Limitations and conditions may apply. Please check with your local Independent Insurance Agent for details.