Homebuying With Guro: Home Insurance vs. Home Warranty
It’s easy to confuse the difference between home insurance and a home warranty. But the truth is, becoming a homeowner comes with a lot of responsibilities. That’s why having a home warranty and home insurance (and knowing the difference between the two) is so important.
A basic home insurance policy typically covers everything inside and outside the home that may be lost or damaged due to storms, theft, fire, and other disasters. That’s why it’s often also referred to as hazard insurance.
If you need a mortgage to buy your home, the mortgage company will require you to have home insurance, and it will be a part of your monthly mortgage payment.
Most insurance companies offer home insurance. A good place to start is the company you use for your car insurance. But, as always, it’s wise to compare with at least one or two other companies. Remember, even if you’ve been with a company for a long time it doesn’t mean they can give you the best rates or terms!
Here’s a few things to compare when you’re searching for the best policy:
Deductibles: What's the difference in payment of, for example, a $500 deductible, $1000, or $2500?
Contents: Do you have collectibles, jewelry, anything of extraordinary value?
Is it a Replacement Coverage?
Is a Mold Policy separate? How much?
Will you be covered for Sinkholes?
Is the home in a flood zone? Then you’ll need Flood Insurance. How much is that?
On the other hand, a home warranty provides coverage for the repair or replacement of systems and appliances that stop working due to regular wear and tear. Most warranties will include water leaks, roof leaks, electrical systems, appliances, and more. And some also offer a rekey service for the new homeowner.
It’s pretty common to ask the seller to pay for a home warranty for the first year after closing. But, if you’re interested in purchasing a home warranty for your home, take a look at my recommendations. Just click below for more information.
Any more questions about home warranty vs. home insurance? Send me an email at guro.midtsund@exprealty.com!
Guro Midtsund is a Realtor with eXp Realty, LLC in Birmingham, AL. This information is deemed reliable but not guaranteed.