Home Warranties vs. Home Insurance: Understanding Water Damage Coverage
When it comes to protecting your home from unexpected damage, you’ll quickly find yourself trying to navigate the differences between home warranties and insurance. Each one serves a unique role—and understanding them is essential to safeguarding your home.
In short, home warranties are geared toward covering normal wear and tear and mechanical malfunctions. Insurance, on the other hand, is designed to protect you from unexpected damages, such as environmental disasters or perils.
But it all gets a bit more complicated when it comes to water damage—mostly because there are several causes for it. Below, we’ll delve a bit deeper into all the insurance and home warranty water damage details you need to know.
Water damage isn’t all that frequent, but it can prove to be a true disaster (both for you and your wallet) if you haven’t taken any precautionary measures.
Water-related issues can stem from several causes, and understanding each one is crucial to choosing between going to your insurance or your warranty provider. Here are some of the most typical causes of water damage:
Each of these can impact your home with different levels of severity, from harmless water spots to severe structural damage. So the critical question is: Do home warranties cover the water damage repair cost?
Let’s start with the basics: A home warranty is a policy that covers the repairing costs of several home appliances and systems. It’s intended to address normal wear and tear, while also providing coverage for unexpected mechanical failures.
So, what does this mean on your end?
Well, imagine your dishwasher suddenly stops working on a lazy Sunday. Instead of spending hours trying to find a repairman, you simply have to contact your warranty provider.
They will find a nearby contractor and help cover the expenses to get your dishwasher up and running again. And if the appliance is gone beyond repair, they will help you offset the cost of a new one.
The exact items, appliances, and systems covered will vary between different providers and plans. Here at AFC Home Warranty, our Diamond Plan covers your electronics and exterior water lines, as well as 18 systems and appliances that include:
You can also add extra coverage for less common stuff such as pools, spas, well-pumps, or stand-alone freezers. As far as systems go, home warranties usually cover (among other things):
The exact details of the plan will vary depending on your house, the appliances you own, and how much you’re willing to spend.
Home warranties are mostly thought for wear and tear or mechanical failures in your appliances or systems. But what happens when there’s an external situation affecting your home?
And, more specifically, what happens with water damage?
Well, it all depends on the specific causes of the flood, the systems and appliances affected, and your specific plan. However, there are some rules of thumb that will apply in specific situations. Get in touch with your provider to clear all your doubts.
If the water damage comes from the appliance or system itself, then you have a fair chance of getting it covered by your warranty. For example, if your dishwasher starts leaking due to a mechanical failure, then the repair and partial restoration will probably be covered.
The contractor or repairman may need to access internal pipes through your walls, ceiling, or floors for a plumbing leak repair. In that case, your provider may also cover up to a certain amount of money to return the opening to a near-finish condition.
However, if the water comes from outside of the covered appliance or system (such as if the pipes in your kitchen were to collapse), then that won’t fall inside the policy. Instead, that should be covered by your homeowner’s insurance.
If you hired extra coverage for systems such as well pumps, septic systems, or sump pumps, then things may get a bit more complicated. Mechanical failures or broken parts will probably be covered—but external factors won’t.
All warranties have specific cases they will and won’t cover, so make sure you get ahold of all the details beforehand.
Now, to get full protection against (almost) any type of water damage, your home warranty should go hand in hand with trustworthy home insurance. Although both policies sound somewhat similar, there are key differences that make them useful in different scenarios.
As we already mentioned, home warranties give you coverage for mechanical failures, wear and tear, and most other issues that arise from day-to-day use. Insurance policies, on the other hand, cover environmental hazards, perils, and other specific types of damage.
Furthermore, home insurance is more oriented toward protecting your home from structural damage and protecting your personal possessions. But it doesn’t usually cover normal wear.
As such, insurance policies are more suited for covering your home from external calamities such as floods. Most home insurance water damage will stem from factors outside your house—such as a pipe suddenly bursting outside your property.
Understanding the limitations and benefits of each type of coverage is key to a well-rounded protection plan. Whether you need a water heater replacement or there's heavy rain pouring through your ceiling, having both home insurance and a warranty can save you some trouble (and money).
If you’re looking for quality home insurance providers, we’ve partnered with Money.com to provide this list of trusted providers near you:
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Home warranties are designed to help you manage the day-to-day costs of maintaining your home’s appliances and systems.
On the other hand, insurance offers protection from sudden, unpredictable, and external events that can damage either your home or your belongings. This can range from fires to storms—and, of course, water-related accidents and disasters.
It all comes down to what caused the problem in the first place!
Water damage can be devastating for your home and wallet, so taking preventive action is key. But if water damage does occur, the policy right for your specific case will depend on the cause of the water damage.
Home warranties will protect you from appliance or system failures stemming from normal wear and tear. This includes leaks in your appliances (such as dishwashers) and aging damage in your plumbing.
Home insurance, on the other hand, is aimed at keeping you covered when the water damage comes from external sources. Floods and burst pipes are probably the best two examples of this, as they don’t come from the usual use of your home’s systems.
If you haven’t already, take a closer look at your home warranty and water damage insurance contracts to fully understand the extent of the coverage. You may need to fill some gaps with a specific plan—such as if you have any extra plumbing systems.
With the right protection in place, you’ll be able to enjoy a greater peace of mind knowing you’re ready to face any challenge that comes your way. If you’re ready to start covering your home from wear and tear, check out AFC Home Warranty plans today!
Although DIY projects are a fun exercise in how handy you are, you shouldn't have to do everything yourself. At America's First Choice Home Warranty, we let you customize your coverage to fit your needs. From the smartphone in your pocket, to the roof over your head, we let you pick and choose what you want help with.
Additionally, we know that your house means your rules. If you have a trusted repairman you'd like to look at that leaking dishwasher or stubborn HVAC system, we'll let you pick your own licensed technician to do the work. If you don't have anyone in mind, we'll send a professional from our nationwide network of over 40,000 repair-ready technicians.
Reach out to AFC today to discuss our home warranty plans and learn how you can DIY with us.
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