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Homeowners Insurance versus a Home Warranty

Homeowners Insurance versus a Home Warranty

When planning for upkeep on your Reston home, you may be wondering if you need a home warranty in addition to your homeowner’s insurance policy. Let’s dive in and explore the differences between the two so you can decide what’s right for you!

Homeowners Insurance

Most mortgage companies require that you purchase homeowners insurance, so this is not something that is optional. However, having homeowners insurance makes sense to safeguard one of your biggest investments.

Every homeowner’s policy is different, but all home insurance policies cover certain basic things, such as damage to your personal property, theft of jewelry, personal liability, and coverage of additional costs that arise from a covered loss.. Dwelling coverage includes damages from things like fire, smoke, lightning, wind, hail, falling objects, vandalism, and theft. Dwelling insurance does not cover improper maintenance, floods, earthquakes, and water back-ups, but you can purchase additional insurance to cover these possibilities.

Keep Your Options Open

After your initial purchase of homeowner’s insurance, it’s a good idea to shop around every two to three years to make sure you are getting the best deal. This may also involve inquiring about car insurance rates too, since many people bundle both coverages to save money. If you decide to look into making a switch, be sure to compare the same amount of coverage. A cheaper rate is only worth it if the policy provides the level of coverage that you need.

The Home Warranty

A home warranty provides homeowners with discounted repairs and replacement on major components of the home such as the furnace, air conditioning, plumbing, and electrical systems. Major appliances including the washer, dryer, stove, and refrigerator are often also covered.

Many of the things covered in a home warranty are not covered by homeowner’s insurance or will not cost enough to meet your home insurance deductibles. You will pay an upfront fee for the year, and then be subject to a service fee of around $75 to $125 each time you call in for a repair.

Though a home warranty can save you the worry about costly repairs when things break, there are some drawbacks to keep in mind.

Home warranties won’t cover items that have not been properly maintained and determining this can create disputes between homeowners and warranty companies. Also, while a home warranty eliminates the need to find your own contractors for repairs, you will have no control or say over who is hired, and little recourse if you are not satisfied with the quality of the repair. 

Still, a home warranty can be a cost-effective way of dealing with eventual repairs. If the idea of a home warranty appeals to you, just be sure to choose your home warranty provider wisely. Recommendations from friends and online resources can help you find reputable home warranty companies that will pay for legitimate repairs when needed. Check out these roundups of the best home warranty companies for 2021 at U.S. News & World ReportMoney magazineand This Old House.

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