Watch on your mobile device >>
Homeowners Insurance is great – it covers a lot of things like fire, theft and vandalism – and in case there is a storm that causes significant damage, the policy’s right there to protect the owner. But what about a policy that looks after the interests of the property while it listed on the market and one that works to the advantage of both sides of the buying and selling fence? A home warranty is a perfect supplement to a homeowner’s insurance policy and it broadens the overall coverage in a variety of ways. Here is a rundown of the variances between the two and how a seller getting a warranty policy on their home for sale is a great tool!
The Benefits of a Home Warranty Policy
While home insurance largely covers catastrophic incidences and damage, a home warranty policy goes far beyond in that it address the home including wear and tear items. Also, maintenance and repair is typically includes in a home warranty policy. As a selling tool, this is fantastic, because during the process – or even after the home is sold – for up to 13 months, the areas of the home covered under the policy are warranted. Oftentimes, a buyer will come across an issue with something in the home that could become a deal breaker but with the added peace of mind of a warranty, the seller can sit back and relax knowing that most things will likely be covered. Examples of things that fall into range of coverage on a home warranty are flooring, plumbing systems, electrical systems, and wear and tear of these areas plus also the furnace and in come cases, the roofing or other major components of the home.
Home Insurance Policy Advantages
The single biggest difference between a home warranty versus a home owners insurance policy is that the latter covers the basic replacement value in general if there is a major catastrophe such as a storm that cause damage, fire, theft or vandalism or personal liability. There is not personal liability coverage under the home warranty policy, rather it focuses on the “used” contents of the home.
How a Home Warranty Policy Helps in a Real Estate Transaction
Home Warranty of America is a company that provides very good coverage under their policy (for a list of their benefits, clickhere) including 13-months of free seller coverage, with coverage beginning on the first of their home being listed for sale. The free coverage period for the seller lasts for up to 180 days and the policy is only paid for upon sale of the home at closing. The best part of a home warranty policy is that even after the buyer has taken possession of the property, the coverage continues. That means that as a seller, you will not have to contend with any last minutes issues that can and do come up. When applying for the warranty, be sure to choose coverage that address all potential concerns you may have for the home so that if there were a need for repairs or coverage, you would have it provided as a benefit.
An industry association held a study in which it was determined that not only do homes sell up to 50% faster when there is a home warranty policy in place, but also the selling price typically comes within three percent of the list price. In today’s real estate market – this is an advantage that any seller would want to avail!
