Owning a home is one of the biggest investments in anyone’s life. But you might have difficulties in determining which home protection is good. Let’s say home warranty vs home insurance. There are still many people who don’t know what makes them different. Both of them are actually good protection to have. However, they offer variety of protections that you should learn. You don’t need to worry because there will be basics of home warranty vs home insurance to understand below.
Home Warranty Focuses on Repair or Replacement
Home warranty becomes the first discussion about home warranty vs home insurance. The most visible aspect about this warranty is that it provides repair or replacement of system equipment and components. It can be said that it offers guarantee when you experience problems with the equipment. Whether it’s a washing machine, plumbing, HVAC components, even swimming pools. There will be a home guarantee with a 12 months contract.
It’s not Mandatory to Obtain a Mortgage
In line with the point above, there is still one thing about home warranty to know. Besides a 12 months contract, it’s not a mandatory to obtain a mortage. This warranty offered is purely an option. So, this can be suitable according to your needs. But you need to be careful when it comes to choosing. It is better to focus more on the budget because there will be additional for additional services as well. Usually there are packages for systems and equipment at a price of $ 75 per month. If this package already covers your needs, there is no need to add services.
Home Insurance Covers Any Accidental Damage
Let’s move on to the next term namely home insurance. If the home warranty focuses on repair and replacement, what about home insurance? This will cover any accidental damage in your home. This can be caused by natural disasters, fires, or theft. Not only that, you also need to know if there are four areas that cover this policy. Personal property, interior, exterior, and loss become the responsibility of the company. You don’t need to be afraid anymore if you experience this calamity.
It’s a Mandatory before Issuing a Mortgage
Unlike the home warranty which is not mandatory, home insurance is the opposite. It’s a mandatory before issuing a mortage. In general, banks will need this to issue your home mortgage. Then for the policy, this is renewed every year. You will spend around $ 300 to $ 1000. Does this sound expensive to you or not at all? However, all the policies offer deductible. It means that the claim is made when you pay it first. Then it will process additional costs for the insurance.
If you are still a little bit confused, there will be an example that you can understand. For those who experience problems such as broken pipes, the insurance will come to your house. Then it fills in claims for improvement. After everything is okay, this will automatically reduce your balance. Now, is this more helpful than warranty? You should think twice before choosing the best one.