Have you ever wondered what is the difference between Home Insurance Coverage and Home Warranty Coverage?  We sometimes get calls from clients asking if there is coverage on their Homeowners Insurance policy if the refrigerator breaks down.  The answer that we have to give is that it depends.  What do we mean by that?  And No, we are not trying to be sassy. Often the best way to explain insurance coverage is to discuss examples.

 Scenario 1 – Your refrigerator stops working and the cost to repair or replace the compressor is several hundred dollars.  Your Homeowners Insurance policy would not cover that but a home warranty may cover it.  For insurance coverage, there must be a sudden and accidental loss, so a failed compressor does not trigger the coverage.  On the other hand, a home warranty policy would likely cover that repair as typically kitchen appliances are included in Home Warranty coverage. In this case, the home warranty may provide coverage while the homeowners policy does not.

Scenario 2 – If your refrigerator breaks and water leaks from ice maker inlet valve damages your hardwood floor, that can be a costly repair.  The water damage to the floor will likely be covered by your Homeowners Insurance policy. The Home Warranty will not cover the damage to your floor buy may in fact cover the repair to the refrigerator.

The question is do I really need and Homeowners Insurance policy and a Home Warranty?  The answer depends on your preference.  A Homeowners Insurance policy is going to cover your home and the contents for many sudden and accidental occurrences such as a fire or burglary and even provides personal liability protection too.  A home warranty will help pay for repairs to your appliances and possibly other add-ons that you may purchase. Since we don’t sell or offer home warranties here at SMD Insurance, we don’t want to make any representations about whether or not they are worth the money, but when it comes to Homeowners Insurance, we will guide you in the right direction.

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