The Difference Between Home Insurance and a Home Warranty

When it comes to protecting your home, understanding the difference between home insurance and a home warranty is crucial. Both offer valuable coverage, but they serve distinct purposes and cover different aspects of homeownership.

Home Insurance vs. Home Warranty

Home insurance is a policy designed to financially protect your home and personal belongings from unexpected events, such as fire, theft, vandalism and severe weather. It generally includes liability coverage in case someone is injured on your property. Mortgage lenders usually require home insurance, which can be crucial for safeguarding their investment in your home. The coverage typically encompasses the structure of your home, personal property and additional living expenses.

In contrast, a home warranty is a service contract that can help cover the costs of repairing or replacing home systems, such as HVAC systems, plumbing, electrical systems and appliances that cease operating due to normal wear and tear. Home warranties are typically optional and can be purchased anytime, often during a real estate transaction.

The primary distinctions between the two can be found in their coverage and intended purpose. Home insurance is designed to financially protect against significant, unforeseen events that could cause substantial damage or loss. In contrast, a home warranty focuses on maintaining and repairing household systems and appliances due to everyday use. Additionally, home insurance policies often have higher premiums and deductibles compared to home warranties, which usually charge a service fee for each repair visit.

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For home insurance near you, contact Contigo Insurance Agency.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.