Home insurance and home warranty are two important forms of protection for homeowners, but they serve different purposes and cover different risks. Understanding the similarities and differences between home insurance and home warranty options can help you make an informed decision about which form of protection is right for you.
Home insurance, also known as homeowners insurance, is a type of property insurance that covers the structure of your home, as well as your personal belongings, in the event of a covered loss such as a fire, theft, or natural disaster. Home insurance typically also provides liability coverage in case someone is injured on your property.
A home warranty, on the other hand, is a service contract that covers the repair or replacement of major home systems and appliances, such as your heating and cooling system, electrical system, or refrigerator, in the event of a breakdown. Home warranties are typically purchased for a one-year term and can be renewed annually.
While both home insurance and home warranty options provide protection for homeowners, there are some key differences to keep in mind:
Coverage: Home insurance covers damages to your home and personal belongings from covered perils, as well as liability coverage. A home warranty covers the repair or replacement of major home systems and appliances.
Cost: Home insurance is typically more expensive than a home warranty, with the average annual cost of a homeowners insurance policy in the United States being around $1,211, according to the National Association of Insurance Commissioners (NAIC). The cost of a home warranty can vary, but is typically in the range of $300 to $600 per year.
Deductibles: Home insurance policies typically have a deductible, which is the amount you will pay out of pocket before your insurance coverage kicks in. Home warranties do not typically have a deductible, but instead have a service fee that you pay each time you need to use the warranty.
Choice of repair or replacement: With home insurance, you have the choice to repair or replace your damaged property, as long as the cost is reasonable. With a home warranty, you are typically limited to the repair or replacement options provided by the warranty company.
Now that we have established the similarities and differences between home insurance and home warranty options, let’s take a look at some of the best options available nationwide:
Best home insurance options nationwide:
Best home warranty options nationwide:
It’s important to keep in mind that the best home insurance and home warranty options for you will depend on your specific needs and budget. To get the most comprehensive coverage, it’s a good idea to consider a combination of both home insurance and a home warranty.
For more information on home insurance and home warranty options, visit the National Association of Insurance Commissioners (NAIC) website at www.naic.org or contact them at 816-783-8300. You can also consult with a licensed insurance agent or a local home warranty company to learn more about your options and which form of protection is best for you