Home Insurance vs. Home Warranty Insurance
By Pierre Mouchette | Bits-n-Pieces
What does Home Insurance cover?
When you purchase a house, the first thing you must do is obtain home insurance. Home insurance will provide coverage for major repairs to your property and personal items in a natural disaster like flood, earthquake, extreme weather conditions, fire, and theft. If you suffer damage by any of the listed perils, your home insurance will cover the damage and pay for the repair or replace the items that have sustained damage. Home insurance will also cover you if you are a victim of a burglary or malicious damage. This type of insurance does not mean you will be paid for items that malfunction due to natural wear and tear. Your policy will also cover personal liability if someone gets hurt in your home. It could include health care, pain and suffering, and loss of wages.
What is a Home Warranty?
A home warranty or protection plan differs entirely from a house insurance policy. With a warranty, you will get a separate service contract that offers coverage for repairs or replacement of large home appliances and functional services like electric, gas, and plumbing, to name a few. Although your home insurance may cover the total loss of some of these items through a major disaster, they do not cover normal wear and tear. That’s why you need a Home Warranty.
For the ultimate peace of mind and to avoid unexpected significant expenses in your home, it is advisable to take out a home warranty and an insurance policy for the building and contents.
Home warranties cover all functioning systems and appliances in your home that become damaged due to everyday use and age. They offer repair services by qualified technicians in all locations. If the item cannot be fixed, you will get a replacement like your appliance or cash to purchase a new one.
What does a home warranty cover?
With home warranties, it is up to you to decide on which appliances and services you want to cover, and the service contract is renewed yearly. The best way to find out if you need home warranty coverage is to list all your major appliances and home systems and figure out how old they are and whether you could be faced with a considerable expense for repairs in the near future. Some of the items covered by most warrant service companies include all kitchen and laundry appliances, the home's electrical and plumbing of the home and the air-conditioning and heating of the house.
If you want extended cover for your pool or spa or outside plumbing and electricity plus other units like a septic tank, water heater, and more, you can add this to your coverage for an extra cost. Once you have submitted everything you need covered and asked for a quote, you will receive a yearly fee. If this is agreeable with you, it is best to read a sample contract, which most companies have online, to find out the exclusions and caps.
Claims and repairs
Most warranty companies offer a 24/7 toll-free number or online claim forms that you can submit if you want to file a claim. As long as you are covered for the appliance or operating system that needs repair, they will set you up with one of their licensed technicians or contractors who will call you to make an appointment to inspect the damage. You must only pay the service fee you had already agreed to when you signed the warranty. Once the repair or replacement is done, you will be asked if you are satisfied before the technician gets paid. To qualify for services, you must keep up to date with your premium and maintain your appliances properly. Always remember that with warranty insurance, your contract ends after a year and is not auto-renewed.
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