THE DIFFERENCE BETWEEN HOME WARRANTY & HOME INSURANCE

 

When purchasing a new home in Summit County, Colorado, it’s important to do in-depth research on all facets of the home buying process. One thing you’ll need to understand is how to best protect yourself and your Summit County real estate investment if anything were to go wrong. Check out the information on home insurance versus home warranty below to educate yourself on your options.

 

Home Insurance

Homeowners insurance pays for any accidental damages and loss that are caused by fire, lightning strikes, windstorms, and hail, however, damage from earthquakes and floods is typically not covered. It also covers the replacement of personal property in case of theft or damage and liability if a person were to get injured in your home or on your property. According to American Home Shield, the average annual cost of a homeowner's insurance policy ranges between $300 and $1,000, and the bank usually asks you to obtain a policy before the mortgage is issued. Make sure to keep in mind that each type of coverage in the policy is subject to a limit and, in most cases, you will have to pay a deductible.

 

Home Warranty

A home warranty is designed to cover the cost of repairs and replacements of larger appliances and crucial systems in your home that may fail or break due to age and wear and tear. This typically includes but isn’t limited to HVAC, electrical, or plumbing components, kitchen appliances, and your washer and dryer. With a home warranty, you are required to pay premiums year-round, even if you do not use it, and it usually won’t cover damages if appliances were not maintained properly or if the damage is from a fire or other disaster. In addition, home warranties may also charge an inspection fee to have their contractors come out to your property to inspect the damage prior to determining if they will cover the cost of any repairs. They may also have a minimum out-of-pocket deductible before any home warranty benefits will be covered. As with any contract, it’s important to read the fine print of the home warranty prior to deciding if a home warranty is right for you. 

 

Experienced real estate agent, George Friou, at Perfect Mountain Home is happy to answer any questions you have about homes for sale in Summit County and can provide insight and advice on topics of home purchasing and ownership. View all homes for sale in Summit County here. If you are interested in learning more about the wonderful mountain towns in our community, Breckenridge, Dillon, Frisco, Keystone, Copper Mountain, Silverthorne, and Park County, please connect with us today! 

 

Disclaimer: All statements concerning home insurance and home warranties in this post are educational in nature and informational only to provide an insight of how typical home warranty and home insurance policies typically compare. Since policies, coverage, terms and condition, and other contract details can vary widely between policies, it is the home purchaser/owner responsibility to verify all details in the policy/policies for which they are considering.

 

Photo by Naomi Hébert on Unsplash