Home Insurance Vs. Home WarrantyHome Insurance Vs. Home Warranty

Understanding The Difference Between Home Insurance Vs. Home Warranty

Those who have a home or planning to buy one might of course be wondering what is the possible difference between home insurance and a home warranty. Well, the discussion on home insurance vs. home warranty is of course a never-ending one but it is also true that both aspects are worth investment and are in use from a better safety point of view. If anything goes wrong then it is the home insurance policies or the home warranty that shall be taken care of the same. Since there is a wide range of protection both these options offer, it is important to understand the role of each of them when it comes to home protection.

Key points to remember:

l  Home insurance offers better protection to not just the home but also the personal belongings such as the perils like theft or fires. It ensures the protection against liability in case the party gets injured when on the property.

l  On the other hand, a home warranty brings a discounted repair and replacement solution for the home system and appliances such as special systems and plumbing.

l  For those who have a mortgage, the lenders need to buy a home insurance policy. The optional part here is the home warranty

l  For better peace of mind, it is better to choose both the home insurance policy and home warranty.

l  Before understanding the difference between home insurance vs. home warranty it is important to understand both the concepts and how they can be helpful.

Know more about home warranty:

A home warranty is one effective service contract that offers better help on paying for the replacement and repairs which are the part of replacement to be covered. This is usually on the basis of the annual fee or the monthly charges. If there is an appliance of the system which is covered as per the plan and breaks down the home warranty company can help in this. It shall send a technician to diagnose the problem and fix the same. These plans are usually in the coverage and themselves.

If a real estate transaction already included the home warranty at the time of purchase the coverage usually begins right after the home is owned. But if the warranty for the home is already purchased then there might be a waiting period of 30 days that need to be followed before the effectiveness of the coverage begins.

What Does a Home Warranty Cover?

Different systems and appliances are part of the home warranty whether in pre-owned homes or new ones. Most of the companies have three different plans. This includes:

l  System Plans (e.g., HVAC, and electrical systems)

l  Appliance Plans (e.g dishwasher, and refrigerator)

l  Combination Plan (everything included in the system and appliance plans)

How Much Does a Home Warranty Cost?

The price of a home warranty can either be an annual fee or the monthly one. There might be some discounted deals that the owner can access. Depending on the location and the plan that is purchased, the services will be offered.

There is also a service fee that is included. This is usually paid at the time when the owner requests the repairs of the appliances or systems that are covered.

What Is Homeowners Insurance?

Home insurance is one of the property insurance types that helps in protecting the house against any damages or losses that are caused because of the covered perils. As per the home insurance information institute, there is a policy of the standard homeowners that comes with four essential coverage types. This includes coverage for personal belongings, the structure of the home, Additional living expenses, and Liability protection

What Does Homeowners Insurance Cover?

Usually, such type of insurance covers the belongings, home and even liability. It offers protection against perils and disasters as well:

l  Theft

l  Volcanic eruption

l  Weight of ice, snow, or sleet

l  Windstorm or hail

l  Riot or civil commotion

l  Vandalism or malicious mischief

l  Falling object

l  Fire or lightning

l  Explosion

l  Damage caused by aircraft

l  Smoke

l  Sudden and accidental tearing apart

l  Damage caused by vehicles

l  Accidental discharge

l  Freezing of a plumbing

l  Sudden and accidental damage

Such type of insurance also covers the personal liability of the injured party and the property while they were in the property itself. The common liability claim includes home accidents, dog bites, and even falling off the trees.

How Much Does Home Insurance Cost?

The premium of the home insurance can vary as per the factors like rebuilding cost of the home, personal belongings value, home insurance claims, marital status. Usually for the home that is owner-occupied the charge can be $1,211.

Understand the Home Insurance vs home warranty difference:

One of the primary differences between both concepts is the simplicity. Talking of which insurance is much simpler and can be availed quickly. The insurance usually protects the whole home from events like damages caused due to weather or any unexpected events like theft. In the case of a home warranty, well it mostly covers the repairs and maintenance cost. It is one of those options that confuse on protecting the budget that often gets disturbed when there are frequent repairs expenses that an owner must bear. The home warranty plan protection can save ample money and there will not be any kind of headache to find a reliable service as the contractors in this field are the trusted ones.


A home warranty covers the price of a major household system breakdown while home insurance covers the personal belongings and even the home. It also offers coverage against personal liability. In case there is a mortgage then the lender shall offer the home insurance policy. To make a wise decision, both choices are good and having both these options is worth the investment. No doubt that a home warranty is an optional approach. But it certainly can offer additional protection with stress-free time. This makes sense especially when the systems or appliances are not covered in the standard warranty and there are high chances of it breaking down.

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