Interesting Question

Would you rather have: 
More time and less money      OR 
More money and less time?

Home Warranty vs Homeowners Insurance

Question: What is the difference between a home warranty and homeowner’s insurance?

Answer: The best way to describe homeowner’s insurance and a home warranty is to compare them to a car purchase.

When purchasing a car, you are required to have insurance on the vehicle. This protects you financially if anything were to happen to the car. The same thing is true with home insurance. If your home experienced damage that is covered by the insurance company (for example a fire), you would be compensated by the insurance company.                                                                                                                                                               A home warranty, on the other hand, provides a guarantee for certain parts of the home, depending on the home warranty policy you purchase.

When you buy a vehicle with a warranty, the car manufacturer is guaranteeing that certain parts of the vehicle will not break while the vehicle is under warranty. If a part does break while under warranty, the car manufacturer will have the problem fixed at no charge to you.  The same is true of a home warranty. The home warranty company will pay to fix anything that is covered by the warranty (for example the furnace).

Once the home warranty expires, usually after a year, most homeowners do not renew. This makes sense because you are familiar with your home, and you probably have set aside funds for home maintenance. Keep in mind that home warranties do not pay for everything. You have to check the policy.

Homeowner’s insurance and a home warranty may sound very similar, but they are two very different products. Insurance protects the buyer from a catastrophic loss. A warranty protects specific aspects of a home. You never hope to need either, but are thankful for the protection they provide. 

We Should all Remember This!