Home Insurance vs. Home Warranty: Which One Should You Get and Why? 

When it comes to protecting your home and your budget, two common options often come up: home insurance and home warranties. While they may sound similar, they serve different purposes.

What is Home Insurance?

Home insurance is a policy that can cover your home’s structure and your personal belongings in the event of unexpected incidents, such as fire, theft or certain types of weather-related damage. It also typically includes liability coverage, which can help with third-party legal or medical costs if someone is injured on your property.

Most mortgage lenders require home insurance as a condition of the loan. This type of policy is designed to help with the financial impact of sudden or accidental events that affect your home or possessions. However, it generally does not cover wear and tear or mechanical breakdowns of systems and appliances.

What is a Home Warranty?

A home warranty is a service contract that can help cover the repair or replacement of major home systems and appliances that fail due to everyday use. This can include your HVAC system, water heater, plumbing, electrical systems and kitchen appliances.

Unlike home insurance, a home warranty is optional and not tied to your mortgage. It’s often purchased by homeowners who want to manage the cost of maintaining older systems or appliances. Some people also buy a home warranty when purchasing a new home, especially if the home inspection reveals aging equipment that may need attention soon.

You May Need Both

If you’re buying a home, your lender will likely require home insurance. If you’re concerned about the cost of repairing or replacing aging appliances or systems, a home warranty might be worth considering.

To learn more about how home insurance and home warranties fit into your risk management plan, contact Legacy Insurance today. We’re here to help you explore your options and find the right fit for your needs in Colorado Springs, CO.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.