Can You Replace Homeowners Insurance With a Home Protection Plan?

Most homeowners understand that it is essential to make sure their appliances and home systems remain rubbing and working properly. However, for many homeowners, when systems and appliances suddenly break down, they discover their home insurance does not provide coverage due to the nature of the event that caused the failure. This can result in very expensive repairs and replacements. Many people will start to look for coverage that will help them provide better protection of their assets. They will find home protection plans on the market as an efficient option. Some homeowners have asked if it is necessary to have both home insurance and a home protection plan? Or, should they replace their home insurance with just a home protection plan?

A Home Protection Plan Should NOT Replace Homeowners Insurance

Homeowners insurance differs from a home protection plan. These policies offer broad coverage with specific exclusions. It basically financially covers a home’s structure and belongings in case of such events as:

  • Theft and vandalism
  • Tornadoes, hurricanes or earthquakes
  • Floods, fires, windstorms, lightning, hail or failing objects like a tree
  • Personal property
  • Liability claims from third-party injuries that take place on your property
  • Living expenses if your home is deemed uninhabitable

For example: Lightning caused a power surge that damaged an appliance, computer or entertainment device, or home system. This event would be  covered by Homeowners Insurance not a Home Protection Plan

Home Protection Plans Add A Layer Of Protection

Home protection plans help protect homeowners from costly, unexpected mechanical failures of their covered appliances, devices, and home systems. These plans help contribute towards any needed repairs or replacements if a mechanical breakdown is due to normal wear and tear or ageing. A home warranty can provide substantial protection for many appliances and systems within your home. Plans can be customized to allow homeowners to add various items to their policy.  These add-on options are not covered under home insurance, and can include:

  • Central air conditioning and home heating
  • Interior electrical system
  • Plumbing system
  • Water heater
  • Range/Oven/Cooktop
  • Refrigerator
  • Dishwasher
  • Washer and Dryer
  • Garage door opener
  • Ceiling fans
  • Electronics

What A Home Protection Plan Does Not Cover

Home protection plans do not cover the physical structure of a home or personal belongings that are inside the home in the event of natural or man-made disasters. This also includes its mechanical systems. They also do not cover incidents that a homeowner’s  flood insurance policy would cover.

Note: It is important to look at the Plan’s Terms and Conditions for full coverage details including all exclusions and limitations.

For example: A heat pump failed within a heating or air conditioning system. This event is covered by a Home Protection Plan, not Homeowners Insurance. Also, a mechanical breakdown results in a refrigerator cooling inefficiently. This event is covered by a Home Protection Plan, not Home Insurance.

Both Home protection plans and homeowners insurance offer specific benefits for homeowners so home protection plans are not a  replacement for homeowners insurance, Rather, acquiring both types of coverage maximizes financial protection. At ARWHome, we are a one-stop shop providing coverage not only for major home appliances and systems, but also for new and existing home and computing entertainment products. Homeowners can pick and choose which home appliances and systems they want covered in their plan. There are no long-term contracts so you may hold a policy for as little or for as long as you would like. If you have home insurance, buying a home protection plan is an extra layer of asset protection

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