At Anderson Insurance Group, we receive many calls inquiring about the repair of an air conditioning unit or furnace, so we wanted to take a moment to clarify the differences between homeowners’ insurance and a home warranty.
HOME WARRANTIES – This will help cover the systems and appliances in your home from typical wear and tear and unexpected breakdowns. A home warranty can help repair the following items:
- Air conditioner.
- Furnace.
- Appliances including, your stove, refrigerator, washing machine, dryer, etc.
- Electrical system.
- Plumbing system Including Leaks.
- Water heater.
Home warranties are often included in the purchase of a home and paid for by the seller. One of the key roles of a warranty is to act as a buffer between you and the seller of the home. For instance, if you encounter an issue with your furnace shortly after moving in, your home warranty company can step in, relieving the prior owner of the responsibility. If the warranty is paid for at closing, it will last for one year, after which you can choose to renew it at your own expense.
COST & DEDUCTIBLES: Home warranty’s cost about $600.00 per year and can be renewed after the first twelve months. The deductible for a home warranty can range from $60.00 to $100.00.
HOMEOWNERS INSURANCE – Will not cover wear and tear and the same items that a home warranty covers. Homeowners insurance will cover damage to your home or contents from the covered perils in the policy and will expressly exclude anything that a home warranty covers.
An excellent example of how a home warranty and home insurance work together yet differently is if you have damage to your home from a sudden and accidental leak from your water pipe, the home warranty will pay for the repair to your pipe, and your home insurance will pay for the damage to your home. (both are subject to deductibles; the home warranty is about $100.00, and the home insurance deductible average is $2500.00)
If you have any additional questions about the differences between a home warranty and home insurance, don’t hesitate to reach out to Anderson Insurance Group, the best homeowners insurance agency in Utah.
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Anderson Insurance Group – Salt Lake City – Utah
