It was probably unnerving when you found out you needed home insurance.
But here's the thing: It probably got even more confusing when you learned that you might also need a home warranty plan.
These two products are often confused as being the same thing but they are completely different.
In this post today, I will clear up the confusion of home warranty vs home insurance as well as when and how to use each product.
What Is Homeowners Insurance?
Homeowners insurance is simply protection against the loss of your home, for the structures surrounding your home, for your personal property, or for personal liability
While there aren't any state required guidelines when it comes to homeowners insurance, your bank or lender may require you obtain coverage before they issue you a mortgage.
These policies renew on an annual basis and can cost between $300 to $1,500 per year even though the average cost of home insurance is around $1,083 per year.
Every policy comes with a standard homeowners insurance deductible and depending on the company and where you live, could also come with a wind & hail or hurricane deductible.
So, if you need to file a claim, an insurance adjuster will come to your home and fill out a claim form to repair or replace any damaged items.
Once approved, the insurance company will deduct the amount of your deductible and issue you a payment for the remainder of the balance.
THE SIMPLY INSURANCE WAY
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Agents not required.
Get quotes and sign up online without talking to an agent. But, we are here if you need us.
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Pros And Cons Of Home Insurance
Below we discuss some of the pros and cons to purchasing a home insurance policy:
Pros
Cons
What Does Home Insurance Cover?
A home insurance policy covers any accidental damage to your home and belongings due to:
There are five primary areas covered under the policy:
Dwelling Coverage - The physical structure of the home, both the interior and exterior
Other Structures Coverage - Covers surrounding structures of your home like sheds
Personal Property Coverage - This will cover your personal property in your home or car.
Loss Of Use - This will cover you if your home becomes uninhabitable.
Personal Liability Coverage - Protects you if a person is injured while on your property.
Who Has The Best Homeowners Insurance?
We have found the best homeowners insurance to come from Hippo, you can check out or quick review below.
About Hippo Home Insurance
Hippo is the newest entrant into the home insurance world but is backed by TOPA Insurance company.
As of today TOPA has an A- (Excellent) rating with A. M. Best.
Hippo believes that great homeowners insurance should be affordable, smart, convenient, and fast.
Hippo wants to make sure that you are able to get a homeowners insurance policy that covers you for the most relevant things today.
Product Features
A Free (Roost Water Leak Sensor) With Every Policy
With every policy Hippo offers a free Roost water leak sensor that has a value of $50.00. According to Roost, you can outsmart water with their smart water leak and freeze detector. The way it works is that you place it anywhere the potential for flooding or leaking exists and if it senses water it will send an alert to your smart phone.
Simply Insurance Thinks
Hippo has come out of the gates swinging at its competitors with on average 25% lower premiums. They also have a much faster application and approval process which doesn't require an agent to complete. Hippo is the best answer if you need fast quotes and fast coverage.
Want to learn more? Check out our full Hippo Insurance Review. Now that we have a strong understanding of home insurance, it's time to go over home warranties.
What Is A Home Warranty?
A Home Warranty is simply protection against the loss of your home appliances due to natural wear and tear. When something stops working in your house or breaks due to wear and tear, or is simply malfunctioning, a home warranty plan is what you will need.
These plans will cover a variety of things like like what we showed above. If your appliance stops working, you simply reach out to your home warranty company and they will send a specialist to assist with your item.
A home warranty will not protect your appliances from external damage inflected on it on purpose or accidentally.
Pros And Cons Of A Home Warranty
Pros
Cons
What Does A Home Warranty Cover?
What's covered and how it is covered is going to depend on the home warranty company you decide to go with so be sure to ask for the program specifics before you purchase.
However, here are some examples of things that might be covered for servicing, replacement or malfunction in a good home warranty program:
What Are the Different Options When Choosing a Home Warranty
There are several features available in a home warranty plan to choose from, make sure you ask for all the options then decide which level of service you will need.
Here are some quick examples:
Do Home Warranties Have Deductibles?
Just like you can use the deductible to save money on your home insurance, you can choose to take a higher deductible on your home warranty service contract to pay a lower annual fee.
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Business insurance policies protect you against lawsuits, employee injuries, cybersecurity attacks, and property damage. Click on your state to get a free quote today.
Home Warranty Vs Home Insurance, How Are They Different?
Home warranties and home insurance both cover unexpected situations. However, the difference is that in your homeowner policy covers items if they are destroyed by a covered loss and a home warranty plan covers things that break down from normal wear and tear.
Home Warranty
When something stops working in your house or breaks due to wear and tear, or is simply malfunctioning, a home warranty plan is what you will need.
These plans will cover a variety of things like like:
If your dishwasher stops working or malfunctioning, you would want to call your home warranty company to file a claim and get a technician to come out.
Home Insurance
Homeowners insurance is the best defense you can give your family from a natural disaster destroying your home.
Unlike a home warranty plan, your homeowners will only cover your property if it is destroyed by a covered loss and usually covers:
If your dishwasher is stolen during a robbery, or destroyed due to a house fire, call your homeowners insurance company.
THE SIMPLY INSURANCE WAY
RV Insurance made easy.
Agents not required.
Get quotes and sign up online without talking to an agent. But, we are here if you need us.
Unbiased, expert advice.
Get unbiased insurance education from licensed experts and also avoid dodgy sales calls.
Coverage in minutes.
You can get RV insurance coverage within minutes of getting your quotes and applying.
Home Warranty Claim vs. Home Insurance Claim
In this scenario, your dishwasher breaks down leaking water on the floor and through the ceiling of your basement getting the walls soaking wet and damaging your furniture and floors.
While your home insurance might cover the water damage to the basement and your floors, it will not cover the cost of your dishwasher breaking down.
Your home warranty plan will kick in to cover the broken down dish washer.
A homeowners insurance plan will cover your home and personal property, your home warranty plan will cover appliances and things like air conditioners.
Take Action
Hopefully you now understand what home warranty vs home insurance actually means and you are ready to get covered. If you haven't started the search, you should check out our Hippo Insurance Review for home insurance