With the housing market beginning to recover from supply chain issues, high lumber prices, and labor shortages evident in the COVID-19 pandemic, there has been an incredible increase in new construction throughout Alabama and Georgia. 

In partnership with the U.S. Department of Housing and Urban Development, the U.S. Census Bureau has reported that new construction has reached the fastest growth rate since 2006. This entails a 6.8% increase in February of 2022 alone (a 22% increase from the same time last year).  

If you’re one of the many individuals beginning the process of new construction in Alabama or Georgia, It is important to understand the differences between home warranties and homeowner’s insurance so you can make an informed decision about protecting your future home. 

What is a Home Warranty?

Much like any other warranty you may have (warranties on your car, phone, or computer), a home warranty is a completely optional policy that covers the costs of service to certain systems if it fails unexpectedly due to a defect, wear and tear or some other related issue. Typically home warranties cover major systems (electrical and plumbing) and certain appliances.

The price of a home warranty will vary depending on which systems the warranty covers. They last for a predetermined amount of time and can be paid monthly, yearly, or all at once. Yet the buyer decides how extensive the warranty is, varying the costs drastically. 

Hughston Homes includes a 1-year limited warranty and customer care guarantee to all buyers to cover any concerns about things breaking or failing as soon as you move in. For more information, contact Hughston Homes.

What is Home Insurance?

While home warranties cover your home’s internal components, home insurance covers damage to your home caused by major events including natural disasters, smoke damage, burglary, and vandalism. 

Similar to any insurance policy, you pay a monthly premium for the coverage and a predetermined deductible if you ever file a claim. The overall cost of homeowner’s insurance will vary depending on where in Alabama or Georgia you’re located, square footage, and whether your home is equipped with safety features (alarms or cameras).

For more information on how much your home insurance could be or what the best insurance is for your situation, Bankrate has beneficial articles for both Alabama and Georgia residents.

Is Home Insurance or a Home Warranty More Beneficial?

Unlike home insurance, which is typically required in any mortgage, purchasing a home warranty is completely optional. Thus, the decision to purchase each option should be completely independent of each other. 

Either way, with a home typically being your greatest asset, it is important to use the tools provided to protect it. 

For more information on how to best protect your new construction home, contact Hughston Homes today!

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