You’ve attained your lifelong dream of owning a home, but you’re finding out that there’s a lot of complications and costs that go along with it. You hold homeowners insurance on your home as a requirement for getting a mortgage, although you may not have home insurance if you purchase your house without a mortgage.
Home insurance covers your overall home from property damage caused by fires, natural disasters, fallen trees, and floods. In addition, home insurance covers replacing your personal property within your home in the event that any of it gets damaged during a covered situation. Many home insurance options allow you to adjust the personal property coverage so you have full protection for your assets, no matter how much you end up bringing into your home.
A home protection plan, on the other hand, covers your home’s heating and cooling systems, included appliances, and other essential parts of the existing home systems. Since these systems do not typically get covered under homeowner’s insurance, you would be on the hook for them financially if they fail. A home protection plan gives you a service plan that covers all of these essential home components so you won’t be left breaking the bank should something happen to one of them. This protection plan does not get included in required coverage by your mortgage lender, so it’s something you would shop for on your own. The advantage of this is that you can shop around for an appropriate protection option after you purchase the home, instead of worrying about getting it set up before you go through the closing process on your home purchase.