THE PERFECT COMPLIMENT TO HOME INSURANCE IS A HOME OWNER WARRANTY

A home owner warranty provides peace of mind and financial security, but many Americans, particularly first-time home buyers, don't think that far ahead when purchasing a house.

For months, your weekends consisted of frequenting Open Houses by day and crunching the numbers by night. You looked at more homes and examined the details of more home loan products than you can remember. Finally, you're settled into your new home, with a mortgage you can handle and a home insurance policy you can depend on. You're all finished now, right?

Not necessarily.

You've cleared one hurdle in finding a home you can afford and purchasing an insurance policy to protect yourself from catastrophe. But consider the fact that most home insurance policies expire within a few years of closing on the property. In all likelihood, there will be repairs needed long after your home insurance is null and void; lacking the adequate financial protection for such possibilities spells financial trouble.

A home owner warranty provides continued, affordable coverage against the inevitable breakdowns that will occur within your house or condo. As you own the property for a number of years, key systems and appliances start to deteriorate - no matter how carefully you maintain them. For a premium of just $1-2 a day, and a modest per-service deductible of $40-100, depending on your policy details, you can guarantee that they key components of your home will be protected in the immediate and distant future.

HOME WARRANTY SELLING POINTS
Longevity isn't the only selling point of a home owner warranty. There are many ways in which your warranty fills gaps left by your home insurance, which is crafted primarily as a safeguard against major disasters such as fire, flooding and theft. Home warranty protection is more comprehensive, providing repairs and/or replacement for appliances and systems in your home. This may include kitchen appliances, electronics, plumbing, wiring, air conditioning, heat and more, depending on the coverage you purchase.

People buy insurance because they could not survive without it. A natural disaster that leaves a home destroyed would cripple anyone without enough coverage. Odds are that it will never come into play, however. Statistical analysis proves that most people's homes don't burn down or get leveled by storms. But you cannot predict disasters of this nature, and you need home insurance in case you are one of the unlucky ones.

On the contrary, the malfunction of your appliances and heating system is inevitable. All machines break, or at least need some routine TLC, at one point or another. The cost of replacing and/or repairing such items does not approach the financial ruin you'd be staring at if your house burned down, but over time, replacing and maintaining systems gets pricey. It's wise to leverage your financial resources and extend the value and service life of your possessions through a home owner warranty.

In ensuring you are completely shielded from financial turmoil, the best thing you can do is compare and contrast the home owner warranty and home insurance coverage offered by various companies. Do this many times. Get a feel for where one ends and the other begins. Does a particular warranty offer coverage for all systems and appliances, or are there gaps? Does the warranty overlap with your home insurance? These are questions you need to ask in getting the most for your money.

AVOIDING CATASTROPHE
A common example of a home warranty plan picking up where a home insurance policy stops is when an event takes place that impacts multiple systems in your house. Plumbing is one facet that often leads to such a conundrum. If a pipe freezes and breaks, it may also lead to water damage in the home's interior. The cosmetic damage done to the wall will likely be covered, at least to some degree, by your home insurance policy. But the plumbing will not. Repairing a broken pipe - and many other things like it that you never see or think about - could cost thousands out of pocket.

That's why you need the double-barreled protection provided by insurance and a home owner warranty. Older pipes, furnaces and wiring can't be left to chance. Most basic warranty plans will cover these systems, along with major household appliances, electrical and plumbing. For the money it can (and will) save you down the line, it's well worth supplementing any home insurance plan with sufficient home warranty protection.

When selecting a home warranty program, make sure you choose one that does not discriminate against age of the home appliances and systems. Choosing your insurance policy should involve the same careful thought, as far as making certain your needs are accounted for.

Lastly, it never hurts to set aside some money whenever you can. It's easier said than done, when you're already making payments on a home warranty, insurance and a home mortgage. But every little bit helps. Expect the unexpected when it comes to homeownership.

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