When you buy a new home, you’re legally required to get home insurance. You also have the option to get a home warranty, although this isn’t mandatory.
Both home insurance and home warranties offer financial protection for homeowners in the event of a disaster or burglary. However, there are key differences between the two that you need to be aware of when you buy a new home.
Looking at the reviews of different home insurance and home warranty companies will make your decision easier. Some homeowners choose to get both home insurance and a home warranty, while others are happy with the coverage that home insurance provides on its own.
In this article, we’re going to cover the basics of home insurance and home warranties, and the main things that they protect in your house.
What is Home Insurance?
Home insurance is a type of insurance that protects some of your belongings and the structural components of your house. There are two main components of home insurance – building insurance and contents insurance.
Building insurance covers the structural components of your property, including the walls, windows, and roof of your home. Contents insurance covers your belongings, like your expensive jewelry or electronic devices.
You can either get both components of your home insurance as one package or purchase them separately, depending on which is cheaper for you. Some home insurance providers also offer the option to pay additional money on top of your annual fee for extra coverage.
What Does Home Insurance Cover?
Home insurance plans protect you financially. If your home is affected by fires, floods, or burglaries, your provider will cover some of the costs of damages and stolen goods.
Most home insurance policies cover the costs of repairing or replacing your property’s structural components or your personal belongings in the following events:
- Fires
- Floods
- Water damage caused by burst pipes
- Storms
- Burglaries
- Vandalism
What is a Home Warranty?
A home warranty is a form of insurance that is not a legal requirement for homeowners. It covers the costs of repairs or replacements for a range of appliances and systems in the home.
Home warranty policies can vary, with plans ranging from basic to full coverage. There is also the option to add extra levels of coverage onto a standard policy if you have electronics or structures on your property that you want to protect financially.
What Does a Home Warranty Cover?
Most home warranty plans cover the following elements of a home:
- Electrical system
- Internal plumbing
- HVAC system
- Washing machine
- Tumble dryer
- Dishwasher
- Oven and hob
- Refrigerator
- Freezer
- Built-in microwave
- Water boiler or cooler
You may also want to add extra components to your home warranty to get financial help if they break down and need to be repaired or replaced. Common additions include ice machines, garbage disposal systems, pools, and spas.
