A common mistake homeowners make is believing that their homeowners insurance is all inclusive. They think it will cover everything and anything that goes wrong in the home, including breakdowns to appliances.
But it isn’t and it won’t. In many cases, the things you may think your home insurance policy covers are actually things a home warranty covers.
For the most comprehensive home protection, homeowners often combine their home insurance with a home warranty. Let’s look at what a home warranty covers compared to what insurance covers. We’ll then look at why having both is the best way to protect your home.
What Does a Home Warranty Cover?
A home warranty from 2-10 Home Buyers Warranty (2-10) is an annual service contract. It can protect your budget against the unexpected costs of routine breakdowns to many of your home’s most crucial systems and appliances. Addressing breakdowns for these items can be costly, especially when you don’t expect them. That’s where a trustworthy home warranty company like 2-10 can come in handy.
Here are some of the most commonly covered systems and appliances under a 2-10 Home Warranty.
- HVAC systems (furnace and air conditioner)
- Electrical and plumbing systems, including water heater
- Major appliances: refrigerator, dishwasher, oven/range, washer and dryer
So, say you have a 2-10 Home Warranty and your refrigerator breaks down. Instead of searching for a trustworthy technician and paying entirely out of pocket, you’d file a Service Request. We’d assign a Service Contractor to your request, and they’d make an appointment with you. You’d pay them a small Service Fee, they’d diagnose the problem and report back to us, and we’d authorize a repair or replacement if your breakdown falls under your coverage.
If the problem falls under your coverage, 2-10 can vastly reduce the cost to repair the problem or replace the system or appliance with something similar, per the terms of your Home Service Plan.
What Does Homeowners Insurance Cover?
In short, insurance does the following.
- Covers damage caused by severe weather, fire, vandalism, or theft
- Provides liability coverage against an accidental injury or death on your property
- Helps pay to repair your home or replace personal property caused by outside events
- Requires a deductible on each claim
Insurance does NOT cover the following:
- Failures to systems (e.g., HVAC) and appliances (e.g., refrigerator) caused by routine use
It’s important to note that homeowners who take out a mortgage typically must have insurance. While it isn’t a law, mortgage lenders require borrowers to obtain insurance as a prerequisite to receiving a loan to purchase a house.
Homeowners insurance protects your home against risks like damage from severe weather (e.g., hail, tornadoes), loss of personal property from theft, and liabilities from accidents that occur on your property (accidental injury or death). Some policies cover personal belongings as well. Every time you make an insurance claim, you pay a deductible, which often ranges from $500 to $1,000, for each claim.
Why Have Both?
While most insurance policies sound comprehensive, they have coverage limitations. A 2-10 Home Warranty can complement your insurance, which can go a long way toward protecting your budget.
For instance, if your furnace breaks down due to normal wear and tear, home insurance will not repair or replace the unit. Without a home warranty, you’ll have to repair or replace it yourself entirely out of pocket. Furnaces and other major systems, like electrical systems and plumbing, can cost thousands to repair or replace. When you choose 2-10 as your home warranty company, you could reduce those costs drastically.
On the other hand, say a tornado hit your house and damaged your refrigerator. A home warranty would not cover your loss on the refrigerator. The damage did not occur as the result of routine use. You would need to file a claim with your insurance company.
Get Quality Coverage From 2-10
Now that you know the differences in coverage, you can make the right decision for your home.
A 2-10 Home Warranty can help reduce the costs of unexpected breakdowns.
Homeownership can be expensive. A trusted home warranty company like 2-10 help can reduce unexpected expenses caused by breakdowns to systems and appliances. Covering yourself with both homeowners insurance and a home warranty is one of the most prudent financial decisions you can make.
