When it comes to protecting your home and its valuable assets, two terms often come up: home warranty and home insurance. While they may sound similar, they serve different purposes and provide distinct types of coverage. Understanding the difference between home warranty and home insurance is essential for homeowners to ensure they have the right level of protection in place. In this blog post, we will explore the key differences between home warranty and home insurance to help you make informed decisions about safeguarding your home.

Home Warranty: Protecting Home Systems and Appliances

A home warranty is a service contract that covers the repair or replacement of major home systems and appliances due to normal wear and tear. It provides homeowners with peace of mind by offering financial protection against unexpected breakdowns of covered items. Here are some key features of a home warranty:

Coverage: Guard Home Warranty covers systems such as HVAC (heating, ventilation, and air conditioning), electrical, plumbing, and appliances like refrigerators, ovens, dishwashers, and washers/dryers. The specific coverage varies depending on the plan you choose.

Cost: Home warranties are typically purchased as annual contracts with a predetermined cost. The price can vary based on factors such as the level of coverage and the size of the home.

Service Calls and Fees: When a covered item breaks down, the homeowner can request a service call from the warranty provider. Guard Home Warranty Service Call Fee is $95 for approved claims.

Repairs and Replacements: If a covered item fails due to normal wear and tear, Guard Home Warranty will help cover the repair or replacement cost. However, coverage limitations and exclusions may apply, so reviewing the contract carefully is essential.

Home Insurance: Protecting Against Property Loss and Damage

Home insurance, also known as homeowners insurance, is a financial safeguard that protects homeowners against property loss or damage caused by specific perils. It provides coverage for the physical structure of the home, personal belongings, and liability protection. Here are the key features of home insurance:

Coverage: Home insurance typically includes coverage for the structure of the home, personal property, additional living expenses in case of temporary displacement, and liability protection if someone is injured on the property. Specific perils covered may include fire, theft, vandalism, windstorm, and more.

Cost: Home insurance is typically purchased as an annual policy with a premium based on factors such as the location, size, and value of the home, as well as the coverage limits and deductibles chosen.

Deductibles: Home insurance policies often have a deductible, which is the amount the homeowner must pay out of pocket before the insurance coverage kicks in. The deductible can vary based on the policy and the coverage type.

Claims Process: In the event of covered damage or loss, homeowners must file a claim with their insurance company. The insurance company will assess the damage, determine coverage, and provide compensation for repairs, replacement, or reimbursement based on the policy terms.
Understanding the Difference: When to Consider Each

While both home warranty and home insurance offer protection for homeowners, they cover different aspects of owning a home. Home warranty plans are particularly useful for older homes or homes with aging systems and appliances, providing coverage against breakdowns due to wear and tear. Home insurance, on the other hand, focuses on providing financial protection for the structure of the home, personal belongings, and liability.

In general, homeowners should consider both home warranty and home insurance to ensure comprehensive coverage. Home insurance is typically required by mortgage lenders, while home warranties are optional but can provide added peace of mind. It’s important to carefully review the terms, coverage limits, and exclusions of both policies to understand what is and isn’t covered.

Home warranty and home insurance serve distinct purposes in protecting homeowners from different risks. A home warranty covers the repair or replacement of home systems and appliances due to normal wear and tear, while home insurance provides coverage for property loss or damage caused by specific perils. By understanding the difference between these two types of coverage, homeowners can make informed decisions and ensure they have the right level of protection for their homes.