For homeowners, it can sometimes be confusing to understand which items in your home are covered by which policies. This confusion is particularly relevant when it comes to comparing homeowner’s insurance to appliance warranty policies. What are the differences, and when does each plan apply? In this article, we’ll answer everything you need to know and cover the differences and similarities.
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An appliance warranty is an agreement between the customer who buys a product, and the manufacturer of that product. It outlines that for specified faults or damages, replacements or repairs will be covered by the manufacturer, as long as they occur within a designated time frame.
Appliance warranties can come in the form of manufacturer warranties, extended warranties, accidental damage coverage, and more. Each type of plan covers different situations and conditions. While manufacturer warranties typically come with the product, extended or additional coverage can be purchased from the retailer or third-party providers.
Typically, an appliance warranty covers home appliances including ovens, refrigerators, washers and dryers, and more. Sometimes, customers will pick a retailer based on the coverage they offer through their warranty plan. For example, many customers like to compare Lowe’s vs. Home Depot appliance warranty policies when choosing where to buy a new dishwasher or other appliance.
Homeowner’s insurance is an insurance policy covering damage to the home and property, as well as the contents of the home. Individuals will buy this type of insurance to hedge against risks like theft or fire, which can cause sudden and severe damage outside of their control. Many customers get hazard vs. homeowner’s insurance mixed up, but the former is simply a part of a homeowner’s insurance policy.
Coverage
When you purchase an appliance warranty, you gain protection for one item at a time. For example, you may purchase a plan that covers your refrigerator, and a separate plan that covers your mattress, each with their own different providers, costs, and timelines.
For homeowner’s insurance, you will gain coverage for everything within the home in the case of unexpected damaging events. But if your refrigerator gets dented and stops working because one of your kids threw a toy at it, it would not be covered by homeowner’s insurance, for example.
Costs
Because of the limited set of coverage associated with appliance warranties, they are typically significantly lower in cost. Homeowner’s insurance is more expensive because of its broader scope of coverage, and usually also has a deductible that needs to be met before the coverage applies, bringing about other costs as well. For this reason, it makes sense to use a homeowner’s insurance calculator to estimate those costs, as they vary from person to person.
Duration
Most appliance warranties stipulate a time frame during which they apply. For example, a refrigerator warranty may last around 5 years, whereas homeowner’s insurance is a plan renewed annually and can be in effect for the full duration of owning a home.
Claim process
Both claim processes involve some bureaucracy, but vary from one another. With an appliance warranty, the customer usually has to file a claim with the manufacturer through their website or customer service portal.
With homeowners’ insurance, one has to file a claim through the insurance company, and then work with someone who will assess damages. It can be a longer, more drawn-out process.
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