Are home service contracts insurance?
NO. Insurance policies undertake to indemnify or pay economic loss for damage or liability from unknown or fortuitous events. Insurance pays when appliances or homes are damaged from perils such as fire, water, flood, windstorm, collision or outside forces causing breakage from an accident, such as a tree falling on your house. Insurance covers your liability to others when you are accused or found liable for an accident, negligence or damage to others or others property. Insurance never pays for breakdown of goods or property from normal wear and tear. In this sense, home service contracts are the exact opposite of insurance. Home service contracts compliment an insurance plan; they do not substitute for one.