What is the difference between contents insurance and contents guarantee?

Owning a home requires constant and sometimes costly repairs, from fixing a broken oven, washing machine to replacing a leaking roof. Depending on what needs to be repaired or replaced and why, home insurance may help in one area, while a home warranty may help in other areas. They can both offer you the right protection.

Howner’s insurance covers four main areas under your policy in case of disaster damage such as fire, theft, storm, lightning strike, falling tree, vandalism and many other damages. It covers:

  • The interior and exterior structure of your home

  • Your personal belongings

  • It also protects against claims or lawsuits resulting in bodily injury or damage to property of others caused by an accident on your property or by your personal activities anywhere.

A house warranty is a form of coverage that you can use to supplement your homeowner’s insurance policy and protect you against repair costs not covered by the policy; it can pick up where your homeowner’s insurance policy leaves off. There may even be a possible overlap in coverage between the two. Check with your insurance agent and home warranty representative regarding the details of each of the coverages.

  • It is an annual service contract that lasts for one year, no policy. It usually has no deductible, but a service fee, every time a service professional comes to your home. The average cost is usually $300.00 – $900.00 per year.

  • A homeowner can add optional coverages such as coverage for a pool and spa equipment, septic tank, etc.

  • The cost of the service call ranges from $40.00 to $100.00 per visit and per item.

Typically, it covers things like: air conditioning, heating, plumbing, major appliances, and items that standard home insurance would not cover.

For example, if your washing machine leaks and water damages the floor, your homeowner’s insurance policy may cover the damage to the floor but not repair or replace the washing machine. Your home warranty will cover its repair or replacement.

Another example is if your water heater exploded and caused damage to the walls of your home, your homeowner’s insurance would cover the cost of repairing the wall, while the home warranty would replace or repair the water heater.

Remember that home warranties to be not substitutes for one homeowner insurance and that not every company will offer you the same coverage. Specific calamities and/or exclusions differ per policy.

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If you have any questions about your policy, please contact your insurance agent or home warranty representative.

This article does not contain all available information about homeowners insurance or home warranty, it is for informational purposes only.