While both are great protections to have, home insurance and home warranties offer different types of protection. Here, we learn what each covers and why you should consider purchasing both. Like we have been saying multiple times, owning a home is the one of the greatest investments you’ll make in your life. Protecting your assets is not just smart but integral too. The best way to do this is to purchase both a homeowner’s insurance policy and a home warranty. Purchasing both will cover your home, belongings, appliances and system components in case they need replacement or repair.
A home insurance policy covers any accidental damage to your home and belongings due to theft, storms, fires, and some natural disasters. There are four primary areas covered under the policy: the interior and exterior of your home, personal property in case of theft, loss or damage and general liability that can arise when a person is injured while on your property.
A home insurance policy is usually mandatory, and a bank will generally require you to obtain one before issuing a mortgage on a home. All home insurance policies offer a deductible, which is what you’ll pay when a claim is made. The policy will then take care of any additional costs.
So for instance, say a pipe breaks and floods your kitchen. An insurance adjuster will come to your home and fill out a claim for repair and replacement of any damaged items in your home. Once the claim is approved, the insurance company will deduct the amount of your deductible and issue you a payment for the rest of balance to repair your home. This deductible can also assist in lowering your yearly policy premium. The higher your deductible, the lower your yearly home insurance policy will cost.
Home warranty is a service contract that allows repairs and replacements for system components and appliances that fail with time, or due normal wear and tear. Electrical appliances, plumbing errors kitchen appliances etc are usually covered under this contract. There are provisions to cover larger appliances like pools and spas. These home warranties generally have 12-month contract and these are not mandatory for obtaining mortgages. These are purely out of choice, but once made is a smart choice.
So let’s say your electrical appliances fail. In that case, a licensed, pre-screened technician will come out and assess the problem. If it’s determined that the appliances are not working due to normal wear and tear, and they are covered under the contract, the technician makes arrangements for its repair or replacement. The protection of a home warranty can save you thousands of out-of-pocket pulas and the trouble of finding a trusted service contractor to make repairs.
Let’s face it! Life happens and things break. When they do, a home warranty or home insurance from Alpha Direct can make it easier to get a qualified professional on the case while keeping your budget in line.