What is a Home Warranty policy?
A Home Warranty policy is often a contract for a set period of time, wherein a company agrees to cover certain home repairs.
It is not the same things as a Homeowners Insurance (HO-3) policy. These policies are often a requirement of the mortgage companies, but a Home Warranty policy is generally not.
What is covered?
A Home Warranty policy can cover repairs to any number of home systems or appliances, such as:
- Stove
- Range
- Refrigerator
- Dishwasher
- Washer/dryer
- Central heating and air
- HVAC
- Plumbing
- House exhaust fans
- Electrical systems
Another difference between a home warranty and a home insurance policy is coverage for wear and tear. A home warranty may include language for normal wear and tear that may not be offered under home insurance. However, home warranty companies may also require a routine maintenance agreement as part of their coverage offer.
In contrast, a Homeowners Insurance policy covers more than just your contents such as appliances and home systems. Home insurance covers the entire dwelling and provides liability insurance for injuries to others in and around the property. For example, in the event of an accidental fire, your HO-3 policy would most likely cover all the damages. A home warranty policy would not apply in this example.
Homeowners Insurance Coverage Breakdown
Unlike the Home Warranty policy, the Homeowners Insurance policy is vast. The coverage breaks down like this:
- Coverage A – (Dwelling) Protects the home’s physical structure.
- Coverage B – (Other Structures) Protects detached garages, sheds, decks, fences etc.
- Coverage C: Protects in the form of replacing or repairing personal belongings that become damaged or stolen.
- Coverage D – (Loss of use) Protects in the form of lodging the homeowning if their home becomes damaged to the point a homeowner cannot live there.
- Coverage E – (Personal Liability) Protects the homeowner against injuries to others, on their property, due to the homeowner’s negligence.
- Coverage F – (Med Pay) This coverage can be used to pay for smaller medical-related claims such as Emergency room and Ambulance charges.
Final Thoughts
Some homes in the Brodhead area may benefit from both warranties and insurance, depending on the age and maintenance of the home systems. Your homeowners insurance will not cover wear and tear of maintenance, and a warranty may provide additional coverage for peace of mind.
To learn more about Homeowners Insurance, contact Sagen & Associates. Our Independent Insurance Agents service the Brodhead area as well as Racine and can help find the right coverage for your home.