As a homeowner, protecting your investment is a top priority. This involves safeguarding your property from unexpected events and financial burdens. But with a plethora of insurance options available, including home insurance, it’s easy to get confused, especially when it comes to the difference between homeowners insurance and home warranties.

While both provide financial protection, they cover different aspects of your home and offer distinct benefits. Understanding the nuances between homeowners insurance and home warranties can help you make informed decisions to secure your property and your peace of mind. Here’s what our team at Built to Last Roofing wants you to know.

Key Takeaways‍

• Homeowners insurance protects your home and belongings against sudden and unexpected events like storms, fire, theft, and vandalism. It's necessary for financial protection in case of a major disaster.
• Home warranties cover the repair or replacement of major appliances and home systems that break down due to normal wear and tear. They offer a safety net for everyday breakdowns and can save you from expensive repair bills.
• Homeowners insurance is legally required for most mortgage lenders, while home warranties are optional.
• Homeowners insurance typically covers a broader range of risks and offers comprehensive protection, while home warranties have more limited coverage.
• Many homeowners choose to have both homeowners insurance and a home warranty for complete protection against both unexpected events and everyday wear and tear.

Homeowners Insurance: Your Comprehensive Protection Plan

A homeowners insurance policy is a legally required policy for most mortgage lenders. It provides comprehensive coverage against various risks that could damage your home or belongings. Think of it as a safety net for your investment that covers you for potential financial disasters.

According to the Insurance Information Institute, over 80% of homeowners in Texas are covered by homeowners insurance.

What Does Homeowners Insurance Cover?

Homeowners’ insurance policies typically cover:

• Dwelling Coverage: This ensures that your home's structure, including your roof, is protected against damage from covered perils like fire, windstorms, hail, and theft. If a storm damages your roof, this coverage can help pay for repairs or replacement.
• Personal Property Coverage: It protects your belongings inside your home, such as furniture, electronics, clothing, and personal items, against covered perils.
• Liability Protection: This covers you financially if someone is injured on your property or if you cause damage to someone else’s property.
• Additional Living Expenses (ALE): This covers temporary housing, food, and other essential expenses if you’re unable to live in your home due to a covered event.
• Replacement Cost: This covers the cost of replacing damaged or destroyed property with new, similar items to guarantee you receive fair compensation for your losses.

What Does Homeowners Insurance Not Cover?

Homeowners' insurance typically does not cover:

• Normal Wear and Tear: It doesn’t cover gradual deterioration or damage caused by everyday use, such as a worn-out roof, a leaky faucet, or a malfunctioning appliance due to aging.
• Negligence: It doesn't cover damage resulting from your own negligence, such as leaving a window open during a storm or failing to maintain your property.
• Pre-Existing Conditions: It generally doesn’t cover damage that existed before the policy was purchased.
• Specific Perils: Many policies have exclusions for certain perils, such as earthquakes, floods, or acts of war. You may need additional coverage for these specific risks.

Example: If a fire damages your home, homeowners insurance will cover the repair costs and replacement of personal belongings lost in the fire. It will also cover your living expenses if you need to stay in a hotel during repairs.

Home Warranties: Protecting Your Appliances and Systems

Home warranties, also known as home service contracts, are separate from homeowners insurance. A home warranty company provides coverage for the repair or replacement of major appliances and home systems that break down due to normal wear and tear. Unlike homeowners insurance, which protects against sudden and unexpected events, home warranties cover the everyday wear and tear that can lead to breakdowns.

Nearly 40% of homeowners in the US have a home warranty, indicating its growing popularity.

What Does a Home Warranty Cover?

Most home warranty companies offer home warranty coverage for:

• Major Appliances: This includes appliances like refrigerators, ovens, dishwashers, washing machines, dryers, and garbage disposals.
• Major Home Systems: This includes systems like HVAC systems (heating, ventilation, and air conditioning), plumbing, electrical, and water heaters.

What Does a Home Warranty Not Cover?

Home warranties, as a type of service contract, generally do not cover:

• Pre-Existing Conditions: They usually won’t cover repairs for problems that existed before the warranty was purchased.
• Improper Maintenance: If the breakdown is due to a lack of regular maintenance, the warranty may not cover the repair or replacement.
• Negligence or Abuse: Damage caused by negligence, misuse, or abuse of the appliance or system will typically not be covered.
• Cosmetic Damage: Home warranties usually don’t cover cosmetic issues, such as scratches or dents, that do not affect the appliance’s functionality.

Example: If your air conditioner stops working due to everyday wear and tear, a home warranty will cover the repair or replacement costs, minus the service fee.

Home Insurance or Home Warranty: Which Is Right for You?

Here’s a breakdown of the major differences in the home warranty vs. homeowners insurance comparison:

Ultimately, the choice between homeowners insurance and a home warranty depends on your individual needs and priorities. Consider the age of your appliances, your risk tolerance, and your budget when making your decision.

Built to Last Roofing: Your Trusted Partner for Roof Protection

At Built to Last Roofing, we specialize in all aspects of roofing, from repairs and replacements to new installations. We understand the importance of a strong and protected roof for your home, and we are here to help you navigate the complexities of insurance claims.

We can help you with:

• Filing a Claim: We can guide you through the process of filing a claim with your insurance company to guarantee you have all the necessary documentation and information.
• Working with Insurance Adjusters: We can help you communicate with insurance adjusters, ensuring your claim is accurately assessed and that you receive the coverage you deserve.
• Roof Inspections and Estimates: We can conduct thorough roof inspections to identify the damage, and provide detailed estimates for repairs or replacements.
• Maximizing Your Insurance Claim: We can help you understand your coverage and ensure you receive the full amount you are entitled to.

Whether you need a roof repair, replacement, or assistance with your homeowners' insurance claim, Built to Last Roofing is your trusted partner for all your roofing needs.