Home Warranty and Homeowners Insurance

Ever wondered what is the difference between home warranty and homeowners insurance ? Are they not same? Let’s find answers for these questions.

While home warranty and home insurance products may come across as same, they are totally different. The coverage, cost, terms and conditions vary greatly. Home insurance is compulsory in some cases whereas home warranty is a recommended choice.

Difference Between Home Insurance And Home Warranty

difference between home warranty and homeowners insurance

Home warranty offers protection for your major appliances, as well as plumbing and electrical units. It covers the cost of repairing or replacing major household appliances in case they break down, provided they meet the terms and conditions of the home service contract.

Home insurance covers your home in the event of damage due to natural calamity or man-made disasters and offers you liability protection from lawsuits in case of a third party involvement. If your neighbor came visiting you and accidentally fell and got injured and decides to sue you, then home insurance will take care of the claims. Home insurance is mandatory if you have a mortgage on your home.

What Does A Home Warranty Contract Cover?

Items covered by a home warranty may vary by company and plan, but typically includes the following items:

  • Heating, ventilation and air conditioning system (HVAC)
  • Electrical system
  • Plumbing system
  • Water heater
  • Kitchen appliances such as refrigerator, stove/oven/range, built-in dishwasher, built-in microwave, garbage disposal, built-in trash compactor
  • Clothes washer and dryer
  • Garage door opener
  • Coverage for pools, spas, well pumps and other items may be available for an additional fee.

Benefits Of Home Warranty Coverage

To The Homeowner

  • Placing a claim and getting your appliance repaired is lot more easier.
  • Helps save up huge costs.
  • You can get repaired as many appliances you want provided they are covered.

To The Seller

  • Home may sell faster and at a higher price.
  • Protection from after-sale legal disputes.
  • Increases marketability of home.

To The Buyer

  • Warranty coverage on major systems and built-in appliances.
  • Protects your cash flow.
  • Access to network of qualified service technicians at your fingertips.

Home Insurance

In case of an uncertain event like fire, theft, vandalism, or certain natural disasters, the cost of damages are covered. It also covers your personal items and gives you liability protection. Liability insurance will protect you from lawsuits in the event that someone is injured on your property. Home insurance will only insure your personal items in case they are stolen or ruined in a disaster. Repairs and replacements due to wear and tear are not covered.

What Does A Home Insurance Policy Cover?

The insurance policy varies depending on your state of residence and type of policy, but generally it will cover the following.

  • Structure and contents of the house.
  • Personal property such as indoor and outdoor furniture, clothes and home electronics such as computer, TV, stereo, etc.
  • Jewelry may be covered up to a certain value, or itemized for its full value, or excluded entirely.
  • Living expenses if your home is uninhabitable as a result of a natural disaster.
  • Events like theft, vandalism, fire, windstorm, lightning, hail, falling objects such as a tree.
  • Liability claims such as someone got hurt while in your property and decided to sue you. The policy will take care of it.

Benefits Of Home Insurance

Home is the most prized and cherished possession any individual can have and nobody anticipates damages to this, therefore a home insurance provides you the following benefits when you cover your home.

  • Covers accidental damages to your interiors and exteriors as well.
  • Easy to renew all you have to do is pay the premium on time.
  • Processions are covered regardless of new or old.
  • Assures you peace of mind and gives you a feeling of safety and security.
  • Pays for loss and minor damages like broken glass of a window.

Cost/Pricing For Both

A standard warranty runs $300 to $500 for a year of protection, which covers the cost of repairing or replacing a home’s major systems and appliances. Home sellers typically pick up the tab for the first year of coverage. Extended coverage plans for pools, spas and washers and dryers can be purchased at an extra cost.

Insurance cost varies from state to state and depends on the extent of coverage and the location of the property but a standard insurance can cost any homeowners insurance is between $300 and $1,000.

How To Choose A Home Warranty?

When you are planning to buy a home warranty, make sure that you do some research. Check our home warranty reviews section that provides pricing, comparison, quotes and consumer reviews of all major companies. When you are getting price quotes, inquire to look over a sample policy. Bear in mind to understand the entire policy, together with the fine print.

Another advantage of home warranty policy is that it is transferable. That means when you sell the house the warranty would be passed to the new owner. This has proved to be a well-liked feature amongst home buyers as homes having home warranties are selling at increased prices and in much shorter times. This in itself could make it sensible to get a home warranty policy.

How To Make A Claim?

When a covered appliance breaks down you need to contact your warranty company. A warranty company already has business ties with different service vendors. They will in turn contact a service repairman to come to your home and repair the appliance. The repairman will fix the item or recommend replacing it. The service repairman will bill your warranty company directly, but you have to pay a service charge when the repair person visits your home.

How To Choose Home Insurance?

With any kind of insurance, it is always a good idea to shop around and evaluate benefits and prices as most insurance companies will provide you a policy discount. Ensure you read the policy before writing a check and ask any queries that you have in mind.

So, the conclusion is that home warranty and insurance are complementary to each other. You can choose to protect everything you own, provided you can afford to. Keep in mind that these insurance products do cost a bit more, but compared to the benefits they provide and the peace of mind you get, it seems like a very small amount. Insure your home as well as buy a home warranty all within your budget.


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Buyer Beware!!!!! Home Warranties are frauds! There are so many exclusions on plumbing systems that invalidate any value as well as seriously inadequate caps on the amount the warranty will pay on HVAC and the like that for the most part, they give one a false sense of security with inferior protection. The service fee is no bargain when you receive little more than a cursory exploration of a problem with no resolution. And a gateway for service providers to address the uncovered issues to a captive audience. Most recently, I noticed some air/noise in my plumbing system when toilets flushed etc. Called the Home Warranty Company that had been provided at the house purchase & paid the service fee to get a plumber out to the house. The plumber arrived with an inadequately sized snake aware that this involved an 80 year old house that would not have today's number of clean outs , necessitating a longer line. After running the snake as far as he had line, he discovered some very fine, hair like roots with some tissue, stated that roots were not covered so the warranty would not cover anything. Considering that he had not reached any blockage, the state of the line was still unclear. Nothing else was done - no exploration if there were other explanations, no usage of chemicals of any sort or a longer line to see if the line had any other issue. In fact, we were presented with an estimate instead to replace the entire sewer line totally at our cost as the warranty covered none of that to the tune of nearly 8000.00 dollars. The company assured us that they wanted to help us so would give a 10% senior discount. With the age of the house, the city did not know where the connection was to the sewer main, much less where the line was in our yard. The plumber of course did not explain that even if we replaced the line, we would still have an 80 year old main pipe in the house as well as the 80 year old lower lateral under the street (which is the homeowner's responsibility as well). Fortunately, we had enough sense to question what would happen if the lower lateral failed. When we did not jump at the 8Koffer, we received repeated calls as to when we wanted the work done, with each call promising possibly a bit less in charges though still exceeding anything we had expected. Concerned about the persistence in calls for the work to be done, we told the company to stop calling and began our own exploration, tracing at what point the initial snake had stopped. My husband used several drain products recommended for line maintenance and used a plumber snake we had to see if the line was indeed clear up to the point the line exited from the house. After pacing off the property, he dug an exploratory hole outside the foundation and found the main line exit point from the house, as well as a break in the pipe that had been covered up by a previous contractor (i.e. not repaired). We shot pictures of the tennis ball size hole which of course was spewing sewage water out into the ground and called the home warranty company to tell them they had sent an incompetent who had not done anything nor explored anything . Of course, the Warranty company assured us they would look into the contractor but that the warranty did not cover any pipe breakage outside the foundation of the house (the pipe breakage was about a foot outside the foundation. Remember the exclusions part I said - the warranty does not cover roots causing problems , regardless of whether one is certain that there is root penetration - in our case, we suspect the root hairs were part of the dirt at the broken pipe area. The exclusion also does not protect you for any pipe breakage outside the house. The most expensive repairs to plumbing are in the pipes outside your house, not in your plugged toilet or sink. ) Fortunately for us, we were able to have a hose inserted in the pipe break and the rest of the line snaked and the blockage that did exist was removed. In fact, the water pressure applied was taken all the way to the city main. The pipe repair will provide a new clean further down the line. The entire process from hand digging the hole to expose the sewer line, photographing , calling for assistance and waiting for help to arrive, cleaning out the line completely and securing the area took less than three hours. Needless to say, it did not cost 8000 dollars. The warranty not only was of no value, it could have done serious financial harm.
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