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10'000 Hours/Getty Images November 03, 2022 Cynthia Paez Bowman is a former personal finance contributor at Bankrate. She is a finance and business journalist who has been featured in Business Jet Traveler, MSN, CheatSheet.com, Freshome.com and TheSimpleDollar.com. Angelica Leicht is an insurance editor on the Bankrate team. She is truly passionate about helping readers make well-informed decisions for their wallets, whether the goal is to find the right comprehensive auto policy or the best life insurance policy for their needs. Bankrate logo The Bankrate promise
At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation of how we make money. Our content is backed by LLC, a licensed entity (NPN: 19966249). For more information, please see our Insurance Disclosure. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our insurance team is composed of agents, data analysts, and customers like you. They focus on the points consumers care about most — price, customer service, policy features and savings opportunities — so you can feel confident about which provider is right for you. We guide you throughout your search and help you understand your coverage options. We provide up-to-date, reliable market information to help you make confident decisions. We reduce industry jargon so you get the clearest form of information possible. All providers discussed on our site are vetted based on the value they provide. And we constantly review our criteria to ensure we’re putting accuracy first. Bankrate logo Editorial integrity
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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Having adequate coverage is important to most homeowners. After all, a home is a significant investment, and it’s important to take the right steps to protect it. But what many people may not realize, though, is that there are a two different coverage options available for protecting your home and its contents: a home warranty and homeowners insurance. While these two home-related products offer coverage for home-related issues, they actually differ quite a bit from one another. And, you can purchase both a home warranty and a homeowners insurance policy without there being any coverage overlap. Before you make any decisions, though, it’s important to understand how each option works. This may help ensure that your home and your belongings are fully protected in case there are issues that arise in the future. Compare rates and save on home insurance today! Get quotes Close X This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions. Compare home insurance rates
Answer a few questions to see personalized rates from top carriers. Continue Powered by Coverage.com (NPN: 19966249) Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Quick Facts $382/year average savings through Bankrate 2 out of 3 homes are underinsured 1 out of every 20 insured homes makes a claim each year 100% of homes need insurance before getting a mortgage Bankrate See more providers in Choose from insurers in Show More Mortgage Leaving so soon Your custom quotes are just minutes away
Return to form This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions. Compare home insurance rates
Answer a few questions to see personalized rates from top carriers. Continue Powered by Coverage.com (NPN: 19966249) Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Quick Facts $382/year average savings through Bankrate 2 out of 3 homes are underinsured 1 out of every 20 insured homes makes a claim each year 100% of homes need insurance before getting a mortgage Bankrate See more providers in Choose from insurers in Show More Mortgage Leaving so soon Your custom quotes are just minutes away
Return to form Is a home warranty the same as home insurance
A home warranty is different from homeowners insurance. is — as its name suggests — an insurance product. You buy it to protect against life’s what-ifs or what your policy calls covered perils. If a fire burns your house to the ground or a thief makes off with the belongings you keep in your home, your insurer covers the cost (minus your deductible and up to your policy limits) to rebuild, repair or replace, whatever the case may be. A , on the other hand, is essentially a service contract. It can cover repairs or replacements for a number of major appliances in your home, from your water heater to your refrigerator. Both products help cover costs for you as a homeowner. Home insurance steps in after covered perils like natural disasters and theft, while home warranties cover repairs or replacement when a major appliance or system breaks. What does a home warranty cover
A home warranty typically covers home systems such as electrical or plumbing and major household appliances. “You can purchase [a home warranty] to limit the potential cost of repairing or replacing major home systems and appliances that break down due to normal wear-and-tear,” Adams says. “The protections depend on your provider and the plan you choose. In some cases, you can customize a home warranty to include specific items, such as a wine cooler, spa or pool.” Some of the more common systems and appliances covered by a home warranty include: Refrigerators Ovens Stoves Water heaters HVAC systems Washers and dryers If something under warranty breaks due to normal wear-and-tear, you call your home warranty company. They send a technician out (you will usually pay a service fee for this visit). The technician appraises the issue and, assuming they determine it is within the scope of your home warranty, they start the process of getting it repaired for you. You will pay the service fee for the technician’s visit(s), but everything else should be covered. In short, a home warranty is something you can choose to purchase to protect yourself against expensive appliance or system repairs. What does home insurance cover
One of the main topics to come up in the home warranty vs. home insurance conversation is when these products kick in to help pick up the tab for you. Home warranties step in when something breaks during the course of normal use. Homeowners insurance covers you financially against losses or damages due to covered perils. Generally, a homeowners insurance policy will protect you against perils such as: Fires Windstorms Riots Lightning Hail Damage from aircrafts or vehicles Theft Vandalism Homeowners insurance is more comprehensive. It usually covers: The house itself Any other structures on your property (like a detached garage) Your personal property (like your clothes, furniture and electronics) Your if you get displaced from your house by a covered cause Your personal liability Personal liability coverage helps with legal fees in certain cases. If someone sues you after getting hurt on your property, the personal liability coverage in your homeowners insurance steps in, for example. While a home warranty is optional, you likely need to have home insurance coverage. As Adams explains, “Homeowners insurance is required by mortgage lenders to protect your property against covered events, such as damage from a natural disaster or vandalism.” To protect their investment in your house (via your mortgage), your lender will probably require you to keep a homeowners insurance policy in place. Do you need a home warranty
Adams puts it succinctly, saying, “A home warranty is never required.” It is something you can choose if you are worried about the costs associated with homeownership. A home warranty can to give you peace of mind knowing that if something big breaks, you will have help fixing it. If you are worried about repair costs and do not have much money in your savings account, it might be worth considering. “You are likely a good candidate for a home warranty if you do not have ample savings to pay for unexpected and expensive home repairs,” Adams says. That said, a home warranty usually costs at least a few hundred dollars a year and annually — and you will still need to pay for each visit. If you save money instead of buying a warranty, you can build a nice little savings account to cover repairs through the years. The account will not expire like a warranty does. “The downside of a home warranty is that it lasts for a limited time,” Adams says. “If you have not needed repairs during the warranty period, you do not get the cost refunded.” Where can you get a home warranty
To explore your home warranty options, start by asking friends and family for referrals. First-hand experiences could give you a good idea of what to expect from a home warranty company. If you are a new homeowner, your realtor may be able to recommend a company. Lastly, check with neighbors for home warranty suggestions. They may be able to recommend a company they are happy with. Before you shop around using the suggestions and referrals you collected, make a list of appliances and systems you want to protect. If you have a specialty appliance or system — like a pool or wine cooler — jot it down to ensure your home warranty will cover it. Get quotes from at least a few home warranty companies with good customer reviews. Pick the warranty that protects the most appliances/systems against the most causes of breakdown for the least money. Do not forget to factor service fees in as part of the equation. Frequently asked questions
Can I have both a home warranty and home insurance
Yes, you can have both a home warranty and homeowners insurance on the same home. That’s because a home warranty and your homeowners insurance policy will cover different parts or aspects of your home, and tend to work as complimentary products rather than one replacing the other in terms of coverage. In many cases, your home warranty covers the appliances and common systems in your home in case they malfunction or need to be repaired due to normal use. Your home insurance policy, on the other hand, covers you financially against losses or damages due to covered perils. You have the option of purchasing both a home warranty and a homeowners policy, and doing so can be a way to cover all of your bases.
Is homeowners insurance worth it
While it may seem like a pricey purchase, having a homeowners insurance policy in place can help you maintain your quality of life through a number of different disasters. Plus, your home insurance policy protects all of your covered personal property — from your clothes to your electronics — and can even help if you find yourself facing a personal liability lawsuit.
What is homeowners warranty insurance
Using the term homeowners warranty insurance can confuse two different types of home coverage. Homeowners insurance is different from home warranty coverage. The former is an insurance product, while home warranties are service contracts. SHARE: Cynthia Paez Bowman is a former personal finance contributor at Bankrate. She is a finance and business journalist who has been featured in Business Jet Traveler, MSN, CheatSheet.com, Freshome.com and TheSimpleDollar.com. Angelica Leicht is an insurance editor on the Bankrate team. She is truly passionate about helping readers make well-informed decisions for their wallets, whether the goal is to find the right comprehensive auto policy or the best life insurance policy for their needs. Related Articles