What is homeowners insurance? This type of insurance is often confused with a home warranty policy, so it’s important to know the difference.
What is Homeowners Insurance?
Homeowners insurance is often called hazard insurance, and it protects your home against sudden, unforeseen major or even catastrophic events that could do damage to your property. Examples are a tree falling on a roof, a basement flooding after a major storm, windows shattering after a hurricane, etc. Your lender requires that you have this type of insurance as a prerequisite to approving your loan.
The cost of homeowners insurance varies, but most major insurance companies offer rates that are fairly competitive. It’s common to pay anywhere from $35 to $60 dollars per month for this type of insurance.
A home warranty, on the other hand, is an insurance policy that protects against the appliances and major systems in your property breaking down. A typical home warranty policy costs around $400 to $500 per year.
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