If you own a home, you do what you can to protect your investment. However, in the excitement of purchasing a home, many people do not think about the cost of repairs. The good news is that insurance and warranties can help offset the cost of repairs, but they are not the same thing. It is important to understand the difference between the two because when you need a repair, you do not want to be caught off-guard with unexpected expenses.
Homeowner’s insurance is usually required
If you have a mortgage, then you are required to have a homeowner’s insurance policy. These policies cover a loss to a home and property in the event of an unexpected event such as a natural disaster, fire, wind/hailstorm, tornado, theft, etc. In the New Orleans area, we are well-aware of the importance of homeowner’s insurance policies.
It is important to understand that homeowner’s insurance policies do not cover appliances and household systems for repairs or replacement needed due to mechanical failure or regular wear and tear. These policies only cover expenses that are caused by natural disasters that cause damage. If an event occurs that is covered under the homeowner’s insurance policy and destroys appliances or household systems, then insurance coverage will likely repair or replace those items.
What is a home warranty?
A home warranty is not the same thing as homeowner’s insurance. Home warranty policies are not required if you have a mortgage. These policies typically cover the cost of repair or replacement if appliances break or become unusable due to normal wear and tear. This can include items such as refrigerators, ovens, dishwashers, washers and dryers, air conditioning and heating systems, and more.
A home warranty typically costs between $300 to $600 a year for basic plans. If an appliance needs to be repaired or replaced, all the homeowner will need to pay is a service fee, which typically costs less than $80. This can save significant amounts of money for homeowners over time.
When is an insurance company wrong?
Understanding whether or not your homeowner’s insurance carrier is responsible for certain repairs on your property can be complicated. If you think you have been wrongfully denied insurance coverage, contact Scott, Vicknair, Hair & Checki, LLC today. Our New Orleans bad faith insurance attorney will sit with you and discuss your case to determine the best path forward.