Why You Need a Home Warranty and Home Insurance

People often buy a home with the misunderstanding that home insurance covers the major appliances and systems in the home. That may be true in the case of a catastrophic event such as fire or flood. However, the everyday wear and tear of appliances and systems through normal use is not covered by home insurance. A home warranty supplements home insurance by providing you with the most comprehensive coverage.  

What does a home warranty cover?

Home warranties are annual service contracts that protect your home’s major appliances and systems. Plans are typically structured as a renewable yearly contract and will cover repairs and replacement of covered appliances and systems when they inevitably break down due to normal wear and tear.

Many home warranties include coverage for plumbing, electrical, and heating and cooling systems, as well as the refrigerator, oven, dishwasher, washer and dryer. These systems and appliances inevitably fail over time from daily use. With a home warranty you’ll pay a fee each time you request service but there is no additional charge for the repair of covered items.  

At NextEra Home, we also help facilitate the repair or replacement by sending a vetted, qualified local service technician to your home at a time that is convenient for you.

What’s the difference between a home warranty and home insurance?

At this point you might be wondering, “what does home insurance cover?” A home insurance plan protects your home against damage or losses that result from unforeseen events like fires, theft and damage resulting from extreme weather. Home insurance will not cover the repair or replacement of your home’s major appliances and systems due to normal use. 

Home insurance policies often have limitations for coverage that policy holders won’t discover until they submit a claim. Some home insurance plans will cover secondary damages that result from certain types of system and appliance failures. And while home warranties charge a modest fee for each service request, with home insurance claims you pay a large deductible for every claim, typically ranging from $500 to $1,000.

Why does having a home warranty and home insurance provide you with the most coverage?

Ideally, it’s best to have both, as a home warranty will pick up where home insurance coverage ends. Having both home insurance and home warranty coverage gives your home the most comprehensive protection. This way, if a natural disaster occurs, the structure of your house (floors, walls, windows, etc.), your major appliances and home systems can all be covered.

Learn more about home warranties from NextEra Home.