Home Warranty Plan or Homeowners Insurance
What’s the difference between homeowners insurance and a home warranty plan?
The main difference is that homeowners insurance generally covers a system or appliance from unpredictable accidents, while a home warranty protects the cost of repair to lines, systems, or appliances affected by normal wear and tear.
For instance, when you think about a water pipe bursting or a power line failing, you might assume that your homeowners insurance policy will come to the rescue. Unfortunately, more and more homeowners are finding this to be false.
Though homeowners insurance may cover some of the items damaged from this event, it won’t necessarily cover the repair to the failed pipe or line. And, depending on where that pipe or line lies, your utility might also be off the hook, sticking you with the bill.
This presents some major gaps in protection for people who only have homeowners insurance. As a result, the demand for service contracts and warranties – such as car and home services – has grown immensely.
What are the gaps in homeowners insurance?
First let’s look at what it does cover. Homeowners insurance typically provides compensation for damage, loss, or injury of property or personal belongings due to fire, theft, accidents, or other listed perils.
It is incredibly important to secure a homeowners insurance policy, as it protects against unpredictable accidents. Damages can come with high costs that the homeowner would likely not be able to pay for. And, while financial security is on the rise, nearly 25% of Americans don’t have any emergency savings.
What homeowners insurance doesn’t protect against are the more likely costs that come up as your home ages, which include repairs caused by normal wear and tear.
That’s where a home warranty can step in to help protect your budget. Home services contracts, or warranties, provide for the repair of a protected line, system, or appliance that fails due to normal wear and tear.
How can a home warranty plan fill these gaps?
Although you may know that line and system failures are likely to come up at some point, it’s hard to predict when these failures will happen, and an unexpected repair could be costly. Many homeowners find that they’re worth the investment. After all, better safe than sorry!
Learn more about how our home warranty plans can fill the gaps in your homeowners insurance coverage to keep your home running smoothly.Discover warranties