Whether you currently have a home, or are a first time home buyer, you may be wondering if you should have homeowners insurance. Since a home is likely the biggest financial investment most people will make, it is essential to ensure that the investment is financially protected. Although homeowners insurance is not required by law, there are many good reasons to have this financial protection.
If you have a mortgage, your lender will require that you have home insurance during the entire term of the mortgage. As well, lenders can legally mandate borrowers to purchase insurance to cover the amount of the mortgage. Lenders do this because they need to protect their investment in case of loss due to a natural or man-made disaster.
Homeowners insurance basically covers a home’s structure and belongings in case of such events as:
Theft and vandalism
Tornadoes, hurricanes or earthquakes
Floods, fires, windstorms, lightning, hail or failing objects
Personal property
Liability claims from third-party injuries that take place on your property
Living expenses if your home is deemed uninhabitable
Typical home insurance coverage can include:
Dwelling Coverage: The amount of dwelling coverage is typically calculated by the square footage of your house and what it would cost to rebuild the home.
Other structures coverage: Covers replacement for detached structures on the property like a shed.
Personal property coverage: Helps pay to replace certain belongings, such as furniture and electronics.
Personal liability coverage. If you or a family member are found legally responsible for accidentally damaging someone else’s property, or injuring someone, liability coverage may help pay for related repair costs and legal fees, as well as help with medical bills.
Guest medical protection: If a visitor is accidentally injured at your home, this protection helps pay for their resulting medical bills.
Homeowners insurance is normally a requirement by the lender, however it does not cover all the types of damage that can occur. For added coverage, many homeowners complement their home insurance by buying a home warranty plan, which is optional insurance.
Home warranty plans help protect homeowners from expensive, unexpected mechanical failures of their covered appliances, devices, and home systems. These plans help contribute towards any needed repairs or replacements if a mechanical breakdown is due to normal wear and tear, or aging. A home warranty can provide substantial protection for many appliances and systems within your home. Plans can be customized to allow homeowners to add various items to their policy. These add-on options are not covered under home insurance, and can include:
Central air conditioning and home heating
Interior electrical system
Plumbing system
Water heater
Range/Oven/Cooktop
Refrigerator
Dishwasher
Washer and Dryer
Garage door opener
Ceiling fans
Electronics
And More.
Home warranties do not cover the physical structure of a home or personal belongings that are inside the home in the event of natural or man-made disasters. This also includes its mechanical systems. They also do not cover incidents that a homeowner’s flood insurance policy would cover. Both Home warranty plans and homeowners insurance offer specific benefits for homeowners. Home insurance will help to pay for structural damage and loss of personal belongings from covered emergencies, but a home warranty covers repairs and replacements of a home’s systems and appliances when they fail from old age and normal wear and tear.
Many homeowners will opt for both homeowners insurance and a home warranty plan to maximize financial protection. At ARWHome, we are a one-stop shop providing coverage not only for major home appliances and systems, but also for new and existing home and computing entertainment products. Homeowners can pick and choose which home appliances and systems they want covered in their plan. There are no long-term contracts so you may hold a policy for as little or for as long as you would like. If you have homeowners insurance, buying a home warranty is that extra layer of financial protection.
