How is a home warranty different than home insurance?

New home-buyers these days are often offered a home warranty in addition to their homeowner’s insurance during the purchase process. While they may seem similar and provide overlapping benefits, they are two very different animals.

What Is a Home Warranty?

A home warranty is not all that different from a manufacturer warranty on an appliance. Except, in this case, it covers multiple appliances and devices which are lumped under one umbrella.  It can be used to cover costly repairs to major items in the home and is defined by the time more than who made the product. Home warranties are essentially pre-paid service contracts that can provide coverage for things such as your HVAC system, plumbing, or dishwasher, etc.

What Is Home Insurance?

Home insurance, as the name, suggests insurance.  This is the more commonly thought of coverage for unexpected damages to your home from disasters.  Things like lightning, fire, hail, or worse. Having home insurance provides you with the peace of mind and the protection you need from losing everything in a disaster.

One or the Other? Or Both?

When comparing both the warranty option and the need for insurance, it isn’t a choice between the two. You need home insurance.  It covers you for the worst possible outcome, a home warranty is an add-on that can help smooth your finances.

When buying a new home, choosing to purchase home insurance is a great option for the peace of mind knowing that you won’t have to pay out of pocket for unexpected issues in the future.

Some may not see the benefit of purchasing a home warranty.  However,  if you are moving into an older house and want to mitigate the risk of an expensive few years of repairs a home warranty can be a smart purchase.


If after reading this you’d like to check your home insurance options out can help you with a quote. If you’d like more information on the warranty option click here for more of the “what.”