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Difference Between Home Warranty and Home Insurance

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Person writing on paper: Difference Between Home Warranty and Home InsuranceYou just bought your first home and you’re filling out all of the paperwork. Your Realtor mentions that maybe you should consider getting a home warranty. But wait, isn’t that the same as homeowners insurance? No! Find out the differences between homeowners insurance vs home warranty so you can be clear what you are paying for in addition to your monthly mortgage for your house.

What is Homeowners Insurance?

Homeowners insurance gives you financial protection against disasters (i.e. fires, tornadoes, etc.). It provides coverage for the house itself (the structure) as well as for the contents (appliances, electronics, clothes, etc.). However, not all disasters are covered. For example, you must purchase separate policies if you are seeking earthquake and/or flood coverage. If there is a disaster due to poor maintenance on the homeowner’s end, it will not be covered. Home insurance also covers damage caused by pets who reside there because they are technically your property from an insurance perspective. Should a disaster occur, for example a fire, the home itself and the items inside it are insured as well as any injuries to people within the home that you are legally responsible for.

What is a Home Warranty?

A home warranty (also called home appliance insurance or appliance insurance) gives you financial protection against broken systems and/or appliances. Home warranty insurance is designed to provide coverage for appliances and systems that break due to normal wear and tear, whereas homeowners insurance would pay for them if they are damaged by fire, tornado, etc.

Let’s look at an example to provide more clarity around this type of product. If you move into a new home and the dishwasher stops working 6 months later, your homeowners insurance policy won’t pay for it to be repaired or replaced. However, a home warranty may cover that repair/replacement if you have opted to gain this coverage. In most cases, you pay an initial deductible and the rest of the cost is covered by the home warranty company.

Hear From our #1 Pick for Best Home Warranty Companies

Learn more about the difference between homeowners insurance and home warranties by watching this video from #1 pick from TotalProtect.

Want to Learn More About Home Warranties?

Whether you are buying or selling a home, a home warranty is a good investment. Did you know that homes with warranties sell 11 days faster and are sold for an average of $2,300 more than those without? So what are you waiting for? Check out the best home warranty companies. Narrow your picks down and choose from the available home warranty plans for that company. If you need help, give us a shout!

What do you still find confusing about the difference between a home warranty and homeowners insurance?

Kimberly researches everything before she buys. She wants to make sure she is getting the best bang for her buck by purchasing the best product/service, which is why she loves her work. She has a degree in Multimedia Journalism and has been researching and writing professionally since 2013 to help consumers make more educated decisions.

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