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Home Warranty vs. Home Insurance: What Are the Differences?

Across the United States, about 70 million households have homeowners’ insurance. While it’s not a legal requirement for homeowners, if you have a mortgage or loan on your property, the lender will usually make it a condition of the loan. It can protect you in the event something goes wrong, such as a fire or a burglary.

But how is that different from a home warranty? Do they provide the same coverage or do you need to take out both?

Let’s explore the differences between a home warranty vs. home insurance so you can decide what you need in your situation.

What Is Home Insurance?

Home insurance, or homeowners’ insurance, protects your house from major perils. The policy will provide a basic level of coverage and you can usually tailor it to your needs with add-ons. Basic cover usually includes protection in the event of:

  • Fire
  • Burglary
  • Storms

But it provides no coverage for wear and tear. It may also not protect you against floods, hurricanes, and other significant events unless you pay for additional coverage. An insurance agency like can help you find the right level of home insurance for your property.

What Is a Home Warranty?

A home warranty provides protection for what’s inside your home. There are usually two types of coverage – home systems and home appliances. You can also buy combination packages and there are add-ons to choose from.

Home systems cover protects your electrical, plumbing, HVAC systems, and more. If something goes wrong, call the home warranty provider and pay the call-out fee. The contractor will either repair the system or replace it if it’s beyond repair.

Home appliance coverage can repair or replace clothes washers and dryers, dishwashers, ovens, cooktops, and more.

Some home warranties also include regular maintenance of HVAC systems and more. Check out a home warranty guide to find one that meets your needs.

Home Warranty vs. Home Insurance: Which Do You Need?

A home insurance policy is usually a requirement. But a home warranty is a wise investment.

If your furnace, range, or central air conditioning unit dies, would you struggle to pay for a replacement? If so, a home warranty may allow you to plan your finances with more certainty. The advantage of a home warranty is that it will repair or replace any system or appliance, as long as it’s working at the start of the policy.

You can add-on coverage for laptops, sprinkler systems, roofs, and more. It’s an additional monthly expense, but it could save you big time.

If you can afford to get both home insurance and a home warranty, you’ll have the highest level of protection available.

Protect Your Biggest Asset

For most people, their home and the things in it are their biggest assets. If you’re weighing up the pros and cons of a home warranty vs. home insurance, the fact is that a combination of the two is probably what you need.

With both policies in place, you can make financial plans with more certainty. They can give you extra peace of mind – something that’s hard to put a price on!

For more helpful hints and tips, why not check out our Home & Garden section today?


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