Home Warranty vs. Home Insurance: What’s the Difference?

You are probably wondering: what is the difference between home warranty and home insurance? While they might appear quite similar, they actually have many differences, and each of them serves a specific purpose. Keep reading if you want to learn more about home warranty and home insurance alike!

Home Insurance is Your Safety Net

You can think of home insurance in terms of it being a safety net. If something happens to your property or to your items, insurance will help you pay for damages. On the other hand, a home warrant focuses on covering repairs and maintenance needs of home systems, appliances, as well as other things around the house. They both have similar purposes, but ultimately, they can even work together.

In fact, there are many people who actually implement both, to cover different purposes and enjoy more flexibility. Generally speaking, home warranty companies allow homeowners to pay a yearly premium. If anything goes wrong, such as a particular appliance failing, the homeowner does not need to hire a repair company.

Home Warranties Will Cover Many Items

Instead, they can simply get in touch with the home warranty company, which will, in turn, hire a contract and cover the cost of the repairs for any item that is covered under the warranty. A home warranty can be the right choice for you if you are looking to get the main systems in your home covered, including your plumbing, electrical systems, cooling, heating, and more. In some cases, home warranty policies can even extend to some of your main appliances, including a dishwasher, an oven, or a refrigerator, among others.

It’s important to notice that your home warranty often does not cover issues that stem from malfunctioning systems and appliances. For instance, imagine you have a leaking toilet. The warranty company will cover the cost to fix the toilet, but they will not be able to help you cover the cost of any possible water damage caused to your wall or home structure. This is where home insurance may come in handy!


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