Home Warranty VS Homeowners Insurance - YouTube

Today we're talking about Home Warranties versus  Homeowners Insurance what is the difference? Is  

it the same? What is covered? Who should  buy? Who should buy a warranty? Who should  

buy a homeowner's insurance? Many of my clients  have asked these questions so let's get started!

Hi I'm Kevin Morris came into my friends  and family your South Florida Salt,  

Sand and Sun lifestyle specialist with South  Florida Homes Keller Williams Coral Springs.  

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Is a home warranty the same as homeowners  insurance the simple answer is NO . Here is  

why a home warranty plan covers service repair  , replacement of home systems such as heating,  

air conditioning, electrical and plumbing.  The warranty can also cover major appliances  

like your refrigerator, oven and dishwasher. A  home warranty spells out exactly what they include  

in the contract. Some are more robust than others.  In contrast homeowners insurance covers damages  

or losses losses due to known perils which can  include wind, fire, vandalism, hurricanes, hail,  

theft or other events. A typical home warranty  is a one-year contract with a warranty company  

that covers service, repair and replacement of  major home systems and appliances. Anyone who  

owns a home can benefit from a home warranty  because these contracts are designed to reduce  

the risk of unexpected big budget expenses. A home  warranty can also complement homeowners insurance  

by covering damages that home insurance  policies DO NOT or MAY not cover. Home  

warranties are contracts of inclusion while home  owners insurances are contracts of exclusion.  

What this really means is a contract of inclusion  only covers items that are specifically listed  

while a contract of exclusion covers everything  except things that are specifically listed.  

Home warranties aren't as crucial as homeowners  homeowners insurance. Although anyone who owns a  

home should consider a home warranty because it's  an extra layer of protection that can alleviate  

the financial burden of unexpected system failure  , appliance repairs and replacements. What does a  

home warranty cover? the mechanical systems and  appliances in your home have a finite lifespan  

they are not designed or built to last forever.  When a system or appliance breaks the cost to  

repair or replace it can be an unexpected  financial burden maybe even a huge burden.  

A home warranty reduces the risk of getting hit  with a big budget item. This is done by providing  

service repair or replacement due to normal wear  and tear on major built-in household appliances  

and systems. As previously mentioned most home  warranties cover appliances like dishwashers,  

ovens and refrigerators. They also generally  cover major systems including heating,  

air conditioning, plumbing and electrical.  Many home warranties provide optional add-ons  

to cover systems that not everybody has such as a  pool, pumps, septic tanks and weld pumps. You can  

also purchase what are called "cafeteria plans"  or only plans that cover only certain items.  

However do not expect a home warranty to  cover cosmetic defects such as a scratch  

on your stainless steel appliance.  What does homeowners insurance cover?  

Home insurance covers varies depending on the type  of policy a named" peril policy" is basic coverage  

that provides financial protection in the case of  events like fire, theft, wind, hail or vandalism.  

An all risk homeowners insurance policy,  is more expensive offers expanded coverage  

with fewer exclusions. For example with a basic  homeowner's policy if you spill a can of paint  

on your floor and cause damage. The peril would  not be covered. The damage would not be covered  

with an all risk policy it would be covered  as a loss of course, whether an accident like  

paint spill or water backup is covered depends  upon the coverages and the exclusions in your  

homeowner's policy. Whether you choose a basic  , named perils policy or an all-risk policy  

that is more thorough. If you own a home you  should invest in homeowners insurance. In fact  

home insurance may be required by your mortgage  lender or by your home equity lender which is  

another big difference between home insurance  and home warranties. A quality insurance home  

policy will not only cover damages to property but  also to liability for injuries to guests on your  

property. Homeowners insurance also covers damages  caused by natural disasters, hurricanes, hail,  

wind with some with some exceptions flooding,  earthquakes, wear and tear, vermin damage  

aren't covered in a standard homeowner policy.  You will need to look closely at them. One can  

expect a basic homeowners policy to cover the home  structure, personal belongings such as furniture,  

personal items, personal liability and additional  living expenses. If for some reason you're not  

able to live in your home because of damage from  a named peril ( fire wind etc)You should consider  

a home warranty if your have a system is nearing  the end of its useful life these systems can be  

very very expensive to replace .A home warranty  can ease the financial burden. If the heating  

or heating ventilation, air conditioning system  breaks a home warranty is beneficial it can cover  

older appliances. Especially if the manufacturer's  warranties have expired, if you don't have a  

stable of home service professionals( many of us  don't) to fix plumbing, electrical appliances. A  

home warranty is helpful because after you  call the home warranty company to file a claim,  

the company will send out a local technician  if you have warranty coverage for the problem.  

You don't have to worry about hunting down  plumbers, electricians or other service management  

providers to fix your appliances , home systems.  You out-of-pocket costs will be limited to  

the fees charged ,which can run anywhere from 30  to 100 dollars. However if the appliances have  

active manufacturing warranties a will cover  them. If your appliances and home systems are  

newer or if you're able to fix mechanical problems  yourself a home warranty might not be necessary  

.Now let's consider homeowners insurance, anyone  who owns a home should purchase homeowners  

insurance. If you rent a home, apartment or a  condo you should purchase renters insurance.  

Homeowners insurance isn't required by law but  lenders will require you to buy a homeowner's  

insurance policy and for good reason . We can't  control the wind, hail other natural disasters  

but they can damage or even destroy your home  which is likely yours your greatest asset.  

Accidents happen and who knows if you'll be a  victim of theft, fire or somebody could actually  

fall. What if somebody vandalizes your property  without without homeowners insurance you're liable  

for the damages. Serious damage to your home could  cause financial strain or even financial ruin.  

Homeowners insurance reduces your risk and  provides you with financial protection beyond  

the home structure standard homeowners  insurance policies. It also ensure your  

belongings in the case of a disaster plus you get  a liability protection in the event of an injury,  

property damage or lawsuits. Homeowners insurance  does not cover everything in your home , it does  

not include "normal wear and tear." In fact it  may be quite basic and cover only known perils  

,when specifically spelled out in the policy.  When buying homeowners insurance coverage  

understand the exclusions "What Is Not" covered.  Very important while a more comprehensive all-risk  

homeowners insurance program offers the best  financial protection, a basic plan is better  

than no plan at all . Note a home warranty  isn't a replacement for homeowners insurance.  

One might choose to buy a home warranty or  you may decide you don't want the additional  

coverage. But as long as you own a home  you should invest in homeowners insurance  

to safeguard your residence against the unknown. A  home warranty plan can fill some of the exclusions  

gaps in a homeowner's insurance policy providing  an additional layer of coverage to reduce the  

financial risk of home ownership .So choosing  a home warranty versus home ownership is not an  

EITHER or DECISION. You will likely be required  by your mortgage lender to have home insurance  

unless you pay cash for your for your home .But  your insurance policy will not reduce the expense  

of plumbing , electrical , repairs or an appliance  replacement. A home warranty is part of an overall  

protection program for your home. In summary  home warranties and homeowners insurances  

are both important tools that reduce the risk  and potentially the financial burden of home  

ownership. Note the two contracts cover completely  different issues. If you're thinking about moving  

to Fort Lauderdale or the surrounding area then  give us a call shoot us a text send us an email  

however you want to get a hold of us we have  you covered !Thanks take care and KMo out.