Decoding the intricacies of home repair insurance

When calamity strikes the home, it can be difficult to know where to turn. Things like pipe leaks, electrical issues, or fallen trees can cause catastrophic damage to the household. Generally, homeowners then rely heavily on their homeowner’s insurance policy for coverage of these damages. But coinciding with the rise of the DIY trend and the home improvement industry, a rather less familiar form of safeguard has been making its clout felt: the home repair insurance, sometimes also known as home warranty.

Home repair insurance has been available for decades, but it's only now beginning to gain traction. Seeing the kind of services provided by platforms like Angie's list, HomeAdvisor, Thumbtack, Houzz, Porch, and BobVila, there is a clear demand for a helping hand in these matters. But while these platforms are great for connecting homeowners with trusted professionals, they do not offer any financial protection for unexpected repair costs. This is where home repair insurance comes in.

Home repair insurance, or home warranty, provides coverage of essential home appliances and systems such as the electrical, plumbing and HVAC. It’s a supplementary protection plan that picks up where homeowners’ insurance leaves off, covering wear-and-tear related damages which are largely not covered in regular homeowners’ insurance.

Now, you must be curious about the difference between homeowners’ insurance and home repair insurance. Homeowners’ insurance is a must-have and it generally covers hazard and liability for accidents in or on your property. It covers damages from events like fire, theft, and storm damage. Whereas home repair insurance is optional and covers items like your appliances and systems in the event they stop working due to age or everyday wear and tear.

Many real estate agents recommend their clients to purchase home repair insurance when they buy a new home because it can save them from expensive repairs in the first couple of years. The decision to purchase this type of insurance also depends on the age of the home and its appliances.

As with any insurance policy, it's important to understand what is covered, how claims are processed, and what the potential drawbacks may be. Home repair insurance may not cover all types of systems or appliances, and you may have to pay additional fees for extra coverage. You should also be aware of the company's reputation and customer service record before making a decision. But having this safety net can give homeowners peace of mind in the face of potential home-related catastrophes. Ultimately, a well-informed decision will save you a great deal in trouble and finances alike in the long run.