Buying a home is a big decision and investment. Just like any other purchase, you want to make sure you take the steps to properly protect it. Hi, I’m Michele Irizarry, CEO & Broker of Shore Prime Properties. All of our buyer clients have purchased homeowners insurance. Many home buyers we have worked with over the years have either bought a home warranty or we negotiated to have one included in the sale. Please be sure to like and follow Shore Prime Properties on YouTube, LinkedIn & Facebook to learn more about the home buying and selling process. Homeowners insurance and a home warranty are two ways to look out for your investment. They both provide an extra layer of coverage for you and your belongings that can give you some peace of mind. So if you’ve ever wondered about the difference between them and what they cover, here’s a closer look at the two and how you can benefit from both.
Homeowners insurance
Though homeowners insurance isn’t required by law, it is often a requirement for the mortgage process. It provides a level of protection for the mortgage lender but also protects your investment. Most insurance plans cover the structure of your home and your belongings from specific incidents, including theft and damage from certain weather events. This means that policies will often cover the cost to repair any destruction to your home from a storm or replace missing belongings that are stolen. And if your house becomes uninhabitable due to a covered incident, the policy will also cover the cost of living (shelter and food) for the time of repairs. However, homeowners insurance doesn’t cover the cost to replace appliances that stop working due to a technical problem, age, or issue that isn’t related to weather damage. The policy can cover the cost if, say, a tree fell through your kitchen and damaged your fridge, but it wouldn’t provide any coverage if the appliance simply stopped working. This is where a home warranty would come in.
Home warranty
Home warranty protects your home’s appliances and built-in systems, offering financial assistance if they should ever stop working. Unlike homeowners insurance, these policies cover the damage that occurs due to everyday wear and tear. Coverage can include appliances like your fridge, microwave, dish washer, and washer and dryer, and systems like your HVAC, plumbing, and electrical. You can also opt to add additional coverage for other appliances and systems, including pools and a second AC unit if you need it.
The bottom line
As a homeowner, you are entirely responsible for the upkeep of your home and your property. There’s no property management to help should you have a pipe burst or appliance stop working, so it’s a good idea to purchase both homeowners insurance and a home warranty. The two work together since one can cover the gaps in coverage from the other, and they can go a long way to protect you and your belongings when you need them the most. Home sellers getting ready to go on the market, should consider that offering a home warranty to buyers can be a great marketing tool. This is especially helpful when the house has older mechanicals or the sellers prefer to sell “as is”.
It’s important to note that coverage will differ from policy to policy, so be sure to speak with your provider to better understand what is and isn’t covered. As always, if you have any real estate related questions, you can reach out to us here at Shore Prime Properties. I’m Michele Irizarry selling prime real estate at the Jersey Shore.
