Owning a home is a significant investment, and safeguarding that investment is essential. Two key players in this protection game are homeowners insurance and home warranties. They serve different purposes and have their unique advantages and drawbacks. In this article, we’ll dive into the pros and cons of both to help you understand why you might need both.
Home Warranty: Your Safety Net for Home Systems and Appliances
A home warranty is an annual renewable service contract that safeguards many of your home’s vital systems and appliances.
Pros of Home Warranty:
Coverage for Systems and Appliances: Home warranties cover major home systems like electrical, plumbing, and heating systems, as well as appliances like dishwashers, stoves, refrigerators, washers, and dryers.
Budget Protection: They protect your budget by saving you hundreds to thousands of dollars on repair and replacement costs. When something breaks down, you pay a service fee, typically $75 to $100, and the warranty provider sends a repair professional to fix the problem. If the item can’t be repaired, they replace it within the terms of the agreement.
Cons of Home Warranty:
Exclusions: Home warranties don’t cover everything. They typically exclude cosmetic issues, damage from misuse, modifications needed for new equipment installation, and pre-existing conditions (unless purchased during a real estate transaction).
Homeowners Insurance: Safeguarding Your Home’s Structure and Belongings
Homeowners insurance protects your home’s structure against various hazards like fires, storms, vandalism, and more.
Pros of Homeowners Insurance:
Structure Protection: It covers damage or destruction of your home due to covered hazards, helping pay for repairs or replacement.
Belongings Coverage: Your personal belongings, even when not at home, are covered if stolen or damaged. It also provides coverage if someone is injured on your property, protecting you from liability.
Living Expenses: In case your home becomes uninhabitable due to a covered hazard, homeowners insurance can cover living expenses.
Cons of Homeowners Insurance:
Deductibles: You must pay a deductible for each claim, which can range from $500 and upwards. Higher deductibles lead to lower premiums.
Limited Coverage: Homeowners insurance has coverage limits and exclusions, such as earthquakes or floods. Extra insurance is needed for these events.
Wear and Tear: It doesn’t cover items that break or stop working due to normal wear and tear, like plumbing or air conditioning issues or appliance breakdowns.
Why You May Want Both: Home Warranty and Homeowners Insurance
In most cases, homeowners’ insurance is required by mortgage lenders to protect their investment. However, even without a mortgage, having homeowners’ insurance is highly advisable for comprehensive protection against unforeseen events.
A home warranty complements homeowners’ insurance by covering the wear and tear issues that your insurance won’t handle. It takes care of repairs or replacements for systems and appliances that are essential to your daily life and can fail over time.
Investing in both a home warranty and homeowners insurance offers a robust safety net for your home and budget. While you may never need to file a claim on your homeowners’ insurance, a home warranty steps in to cover the costs when your systems and appliances break down due to normal wear and tear.
Why Choose Home Life Shield for Your Home Warranty?
Home Life Shield offers industry-leading coverage with 12 plus years of innovation and disruption in the service contract industry. A great example is the addition of Identity Theft Protection and Home Title Fraud Protection included with our home warranty. With a commitment to providing superior value by covering more than just your home but your loved ones from the ever-increasing threat of identity theft, we have the strength and stability to honor our commitments to you. We offer a range of plans to suit almost every budget, ensuring you can find the right coverage to protect your home and finances effectively. Explore our home warranty plans and secure your peace of mind today.