Home repairs are inevitable whether you have a busted pipe that floods the bathroom or just experienced a natural disaster. So who will pay for home repairs? While some home repairs such as roof repair could fall to a homeowner’s insurance policy, other home repairs such as a broken appliance or plumbing problems can be covered by a home warranty. Knowing which to use can be confusing for new homeowners. Let’s take a look at the two and the differences.
What Is A Home Warranty?
A home warranty protects a home’s valuable internal systems. While a home warranty is similar to home insurance, they are not the same thing. A homeowner will pay an annual premium to their home warranty company. If a covered appliance in their home breaks down, they call their home warranty company instead of a repair company. The company will send out a contractor specializing in repairing that particular appliance to repair or replacement.
What Is Home Insurance?
Home insurance protects your home’s structure and personal property from fires, explosions, rain, theft, hail, wind, trees, floods, and other disasters. It may also cover medical bills for injuries that individuals sustained by being on your property. However, home insurance policies have restrictions, such as one policy paying the full cost of replacing damaged property while another only reimburses the actual cash value.
What Are The Differences?
The main differences between a home warranty and home insurance are what they cover. Home insurance will help homeowners pay for structural damage and loss of personal property, while a home warranty covers replacements and repairs of a home’s appliances.
Another difference is that every homeowner must have home insurance while a home warranty is not required. Both protect different parts of a home, and together they can protect your homeowner from expensive repairs.