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The Difference Between Home Warranty & Home Insurance
When purchasing a new home in Leduc, it’s important to do in-depth research on all facets of the homebuying process. One thing you’ll need to understand is how to best protect yourself and your investment if anything were to go wrong. Check out the information on home insurance versus home warranty below to educate yourself on your options.
Home Insurance. Homeowners insurance pays for any accidental damages and loss that are caused by fire, lightning strikes, windstorms and hail, however damage from earthquakes and floods is typically not covered. It also covers the replacement of personal property in case of theft or damage and liability if a person were to get injured in your home or on your property. According to American Home Shield, the average annual cost of a homebuyers insurance policy ranges between $300 and $1000 and the bank usually asks you to obtain a policy before the mortgage is issued. Make sure to keep in mind that each type of coverage in the policy is subject to a limit and, in most cases, you will have to pay deductible.
Home Warranty. A home warranty is designed to cover the cost of repairs and replacements of larger appliances and crucial systems in your home that may fail or break due to age wear and tear.
This includes but isn’t limited to HVAC, electrical, or plumbing components, kitchen appliances, and your washer and dryer. With a home warranty, most are purchased for new home builds. With this, the home builder has to pay a lump sum to the insurance company and if there are any issues the builder is responsible to fix it, or the funds will come out of the lump sum. If nothing is needed fixed by the time the warranty is over, then the builder can get his funds back. If you are looking for a new build or a resale home don’t hesitate to reach out.
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