Home warranty vs home insurance


When it comes to financial protection for the home and its belongings, all homeowners want to make sure they have the right type of coverage that meets their particular needs. Home warranties and home insurance are two protection plan offerings available to new and existing homeowners. However, these coverage plans are not the same, or, in other words, they offer different forms of coverage. When considering home warranty vs home insurance, it is important to know the difference between the two, and what each covers, to ensure that you get the best possible protection of such a major life investment.

What is Homeowners Insurance?

Homeowners insurance provides coverage for damage and loss as the result of external events such as fire, weather, and vandalism/theft. If any of these events cause damage or destroy part of the home, the home insurance company will provide coverage for structural damage and loss of covered personal items, as detailed in the terms and conditions of the person’s home insurance policy. Nearly all mortgage lenders mandate a minimum amount of homeowners insurance as a condition of issuing the mortgage.

Homeowners insurance provides coverage for damage and loss due to:

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

What is a home warranty?

A home warranty provides financial protection to homeowners from unexpected repair and replacement costs for appliances and home systems that are not typically covered under home insurance or manufacturer’s warranty. It is coverage for unexpected repair bills due to normal wear and tear breakdown, and breakdown due to age. Many home warranties provide protection no matter the age of the appliance, electronic device, or home system.

 A home warranty plan can include, but is not limited to, major appliances, devices, and systems such as:

Central air conditioning and heating

Interior electrical


Water heater




Washer and Dryer

Garage door opener

Ceiling fans

And more.

You can find plans offering add-on coverage for plumbing, interior electrical, water/sewer lines, central heating/cooling, well pumps, electronics, and much more.  You can also find customized warranty plans, electronics plans, extended warranties, warranties for a single item,  and bundled home warranty plans.

When it comes to home warranty vs. home insurance, the main difference is home insurance covers unexpected events that lead to damage or loss, while home warranties cover somewhat expected incidents such as break down due to normal wear and tear and age of the item. Also, a home warranty plan is optional.

Because home insurance and home warranties offer different types of financial protection, many homeowners will acquire a home warranty plan as an added layer of protection to their existing home insurance policy. Having both policies provides guaranteed peace of mind.

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