Homeowners commonly get home warranty plans confused with homeowners insurance, even though they are decidedly different things. So, what’s the difference? Both products function to protect homeowners, but not in the same ways.
Homeowners insurance is traditionally required by most lenders, as it protects the lender’s financial interest in the property. These policies aim to provide reparations for homeowners who suffer damage to their property – either to the home’s physical structure or to their personal belongings within the structure. In addition, homeowners insurance provides liability protection to policyholders and is regulated by state authorities.
Home warranties pick up where homeowners insurance leaves off. Home warranties provide repair or replacement coverage for mechanical failures from normal wear and tear of major systems such as heating, air conditioning, plumbing and major appliances like the refrigerator, oven, ranges and cooktops.
Although homeowners insurance policies and home warranties both serve to protect consumers from financial damages, they each have their own particular benefits. In the event of fire, vandalism, theft or natural disaster, insurance policies are very helpful as they protect against losses due to damage to a home or the owner’s possessions. On the other hand, sellers who purchase a home warranty protect themselves from potentially having to cover expenses to repair or replace systems or appliances during their listing period. At the same time, homebuyers can benefit from a warranty because it protects their cash flow by reducing some of the cost for repairs on major systems and appliances while they own their home.
Click here for more information about the Weichert Home Protection Plan.
Image courtesy of Vichaya Kiatying-Angsulee/ FreeDigitalPhotos.net.
