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I have insurance – do I need a warranty?

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Homeowners insurance is a necessary product for your home, and in fact is required by nearly all mortgage lenders in order to protect their investment (your property).  A home warranty is a supplemental, optional type of coverage that can protect the homeowner against home systems (HVAC / Roofing / Etc) and appliance failures and spare the homeowner the replacement cost.

Homeowners insurance covers personal belongings and the entire house in case fire, theft, or natural disasters such as lightning, a tree falling, heavy snow damaging a roof etc.  A homeowners insurance policy does not cover regular maintenance and replacement costs of appliances and most home systems, which is where home warranty coverage picks up.  A home warranty is a type of wear and tear insurance against equipment and appliances such as heater, A.C. unit, plumbing and electrical systems.

What does homeowners insurance cover?

  • Personal property, furniture, clothing, jewelry etc.
  • Structure and contents of the home
  • In most cases your living expenses if the home is not in a living condition due to natural disasters
  • Appliances are covered as well, but only in the event of natural hazard or special circumstances.
  • If someone visiting your house gets injured while in your property (such as a slip and fall) and if you are sued, you are covered by homeowners insurance.
  • Homeowners insurance protects you from fire, lightning, tree-falls, burglary, storms, etc.

What does a warranty cover?

  • Like homeowners insurance, a home warranty can be adjusted or customized to suit the homeowner.  In most cases, basic coverage includes the repair and replacement of all major appliances such as Heating/Cooling systems, Water Heaters, refrigerators, Dishwashers, Ranges, Ovens, washer/dryers etc.  Plumbing and electrical system are also included in most basic coverage plans.
  • Optional coverage varies.  Many companies also cover roof maintenance in the basic coverage, but some companies charge extra.
  • Coverage is generally effective 30 days from the date of buying the policy. But be aware that claims can be denied by companies for various reasons, including what they consider “maintenance negligence”.

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