When entering into a home purchase you will need to know about both, a home warranty and home insurance. Home insurance is not a home warranty. Insurance is typically considered the policy that you purchase through your local insurance agent, like State Farm, Allstate, or Alfa, etc. That type of policy will typically cover your home for wind, fire and theft but may not cover you if the HVAC unit goes out. The policy that covers events such as the HVAC or the electrical outlets malfunctioning is a home warranty. An entirely separate policy purchased with a home warranty company may give you coverage for those damages. At the closing of your home purchase, you have an option to purchase a home warranty. This warranty and coverages vary by company but generally covers appliances, electrical outlets, and much more. The key item to remember about a warranty is that you must contact the company that issued the home warranty before calling the contractor. No coverage will be provided if you call the contractor first. Not sure of the company? Your settlement statement will list the warranty purchase in the 1300 Section of the HUD1 (bottom of page 2) or contact me Kathy G, your Realtor.
