Home Warranty vs Home Owners Insurance
New construction homes usually come with a builders warranty in which the builder guarantees that all the parts of the house will continue to operate and remain in good health for a pre-determined amount of time. A home warranty picks up where that builders warranty expires. A home warranty covers all the items inside the home including the air conditioning units, the furnace, the kitchen appliances and the electrical and plumbing systems.
A home doesnt have to be a new construction to qualify for a home warranty. Existing homes can utilize home warranty plans as well although the may be called different things depending on the company offering them. Service contracts, home protection plans and appliance care are all names which a home warranty could be classified as. A good example of existing homes being put under contract is in the real estate process; many homes these days are being sold with a home warranty attached to it.
Homeowners insurance, while sounding very similiar to home warranty, is entirely different. Home owners insurance hardly ever covers the appliances and systems within the interior of the home except in case of complete loss such as fire or earthquake damage, it also usually covers the damage cause by burglary. Home owners insurance covers the home based on the value of it or by a pre-determined amount set by the policy holder.
When shopping for a home warranty or home owners insurance, it is always a good idea to weigh your options and shop around as much as possible. Plan pricing will fluctuate based on the location and the type of home you own. It is also a good idea to read the fine print of any policy you purchase and ensure it will meet your needs; you dont want to be caught without coverage when you thought you were covered.
Home warranties usually all operate in much the same way: a customer places a call to a call center who will then open a case file for you. A local service technician will then be assigned to you and an appointment will be set up for the technician to come out. Usually a small service fee or deductible must be paid to the service technician upon arrival. Most home warranty companies will require you to open a service request before they pay anything for a repair.
Home owners insurance is in many ways no different than home warranties. It is imperative to know what is and what is not covered as there may be some loopholes or gaps in coverage that you may be unaware of. For example, tornado insurance may not be included and must be purchased seperately. Also, the deductible will vary far more than a home warranty company and will be based off of what your choose.