When it comes to covering your home inside and out, you’ve got options. One option, often required by mortgage lenders like us, is home insurance. Your other option, for a bit of bonus coverage, is a home warranty program. Let’s talk through the differences and see how they stack up against one another, shall we? 

Home Warranty vs. Home Insurance

Home warranty programs and home insurance coverage are essentially two sides of the same coin, each offering varying levels of protection against everyday incidents that might harm your home, your belongings, your family, and even other people. 

Like auto insurance, home insurance is often required by your lender or mortgage servicer. While you can shop around for different rates and levels of coverage, many companies ultimately offer similar benefits—not just for your peace of mind, but to ensure their investment is protected. After all, the business of mortgage lending doesn’t come without risk. You might be able to pay back your home loan, but home insurance makes sure you and the property itself are protected in case of emergency. 

Home warranties, however, are not required by lenders. They often cover things that aren’t included by home insurance, including specific repairs and replacements for broken down appliances. There are a lot of home warranty companies out there, all with their own reviews that you’ll absolutely want to read up on before selecting a plan . . . if you decide to select one at all. Remember, they’re not required, but they may be useful if you’re short on cash after purchasing, or if you purchase a home that comes with dated appliances and systems. 

Introduction to home insurance 

Home insurance policies protect your home from a list of covered perils and damages. They may also offer liability protection in case someone is hurt on your property or if you cause damage to someone else’s property. Examples could include if a tree branch falls from your yard onto a neighbor’s roof, or if your friend’s kid throws a baseball over your fence and through your neighbor’s window.

Home insurance also protects dwellings (that’s your home’s physical structure and the contents within), detached structures like fences, sheds, and garages, and personal property. That last bit could include your computers, televisions, jewelry pieces, and clothing. Additionally, home insurance protects “loss of use,” which provides financial support in the event that your home becomes unlivable for any period of time, and medical payments for yourself and others. 

Here are some other things insurance might protect you from:

• Fires
• Burglary
• Wind
• The occasional meteorite or jet engine falling through your roof

Because home insurance is part of the home buying process, its premium payments can be included as part of your mortgage payment if your lender includes an escrow account (something that’s also often required for FHA loans). In this sense, it becomes part of your PITI, or “Principal, Interest, Taxes, Insurance.”

What’s the cost?

Insurance premiums vary from carrier to carrier, so cost can vary. Oftentimes, it’ll depend on several factors, including:

• Where you live
• Your home’s value
• Dwelling size
• Structure age
• Coverage limits and deductibles
• Home features
• Credit score
• Pets

Pets? Yep, even pets. If you’re a dog lover (aren’t we all?), your insurance carrier may increase your premiums for owning a breed they deem riskier than others. Likewise, other “risky” elements—such as swimming pools—may increase your premiums as well. 

What is a home warranty?

Home warranties differ from home insurance options in that they generally cover specific things, not the broader brush strokes of homeownership. 

Think about it this way: if insurance covers your entire home, warranties cover the individual bits inside—things like appliances, HVAC systems, plumbing and septic systems, roofs, and even swimming pools (at an additional cost, of course). 

Like home insurance, home warranties are paid via premiums. You enroll in a plan and you pay an annual or monthly fee for the ability to submit a claim if something breaks down. If your furnace dies out in the middle of winter, you can file a claim to the warranty company. They work with local partners and will dispatch a business to diagnose and repair the issue, up to a certain covered amount. The “secret” there is that you’ll often be required to pay a “service fee” for that service call. 

Think of it as a deductible, right? Similar to home insurance, you have to pay part of the bill up to a certain amount before insurance kicks in to cover the rest. With a home warranty, you pay a small fee for greater coverage—either a repair or replacement of whatever’s broken. 

Warranties aren’t required, and depending on who you ask, they may not even be necessary. For people without access to a lot of liquid cash for immediate repairs, however, they can be particularly useful, especially for a dated home or aging appliances. 

More coverage, more security.

Ultimately, home insurance and a home warranty are two great ways to protect your investment. Neither is free, and neither will totally protect you from risks, but they’re perfect for people who are looking for a little more peace of mind.

You might be able to pay back your home loan, but home insurance makes sure you and the property itself are protected in case of emergency.

The post Concerning Coverage: Home Warranty vs. Home Insurance appeared first on Cardinal Financial.

9 ways to winterize your second home

• Turn off the water
• Keep the heat above freezing
• Unplug electrical devices
• Empty the fridge
• Prevent pests
• Wash towels and bedding
• Cover your plants
• Store your valuables
• Leave a light on

1. Turn off the water

Make sure the water is turned off completely at the main supply point to prevent busted pipes. Don’t forget to turn off your irrigation system, too, if they’re on separate main supplies. A $500 replacement for a cracked backflow preventer is the last thing you’ll want to come home to. You should also drain anything that holds water, like toilets, pools, fountains, and sinks. If temperatures get extra low in the area, you may also want to pour an antifreeze solution down the drains.

2. Keep the heat above freezing

While you do want to conserve energy while you’re gone, don’t set your thermostat too low. Make sure it’s warm enough to keep the inside of your home above freezing. In general, aim to keep the temperature around at least 50 degrees Fahrenheit to prevent mold and mildew that may form from condensation.

3. Unplug electrical devices

If you leave your power on, unplug all your electrical devices (microwaves and TVs included) to prevent fire hazards and save energy. You may want to leave larger appliances, like your washer and dryer, plugged in to decrease the hassle of getting everything set back up when you return.

4. Empty the fridge

It goes without saying that you should throw out any perishables. Especially if you’re going to be unplugging the fridge, it’s best to take everything out, wash both the fridge and freezer thoroughly, and leave the doors open to prevent any mold or mildew growth.

5. Prevent pests

After you take the trash out, wash the trash cans and put away any soaps, sponges, candles, and other possible food sources for vermin. Try not to leave any food items in the home, even staples like pasta and canned goods. Winter is a great time to donate any usable items you clear out to local food drives and shelters.

6. Wash towels and bedding

Linens, bedding, and towels should be washed and stored in plastic containers. Open up the drawers and strip the beds to let the mattresses air out. That’s one less load of laundry waiting for you when you return.

7. Cover your plants

If you have outdoor plants that don’t do well in the cold, cover them up with an old blanket to prevent frost damage or bring them inside. For plants that require more maintenance, consider bringing them home with you or providing a key to a neighbor you trust who can check in and water them occasionally.

8. Store your valuables

Any boats, dirt bikes, canoes, bicycles, cars, etc. should be stored in a garage while you’re gone. If there are any window views into your storage space, cover them. You don’t want people to see into your house and be tempted to take anything.

9. Leave a light on

A certain Christmas movie comes to mind for this one, but you probably don’t need to go to such extreme lengths as that kid left behind for holiday vacation. A single light left on in a central area will do the trick. You can also install timed lights to create the illusion of an occupied home. It’s a good way to add some extra security while you’re gone.

Do I need to winterize my second home if it’s in a warm area?

If your vacation home is in a warm climate (beach house, anyone?), you probably don’t need to do much to prepare it for cold weather. For the sake of security, energy conservation, and keeping your home clean, however, you’ll still want to turn off/unplug any unnecessary devices and lights, throw out any food, and make sure valuable items are stored out of sight. And of course, don’t forget to lock the door.

Before your leave your second home for the winter, don’t forget to turn off the water and gas, empty the fridge, and secure your valuables.

The post How to Winterize Your Second Home appeared first on Cardinal Financial.