Explaining the Difference Between Home Warranty Vs Home Insurance

By: ROS Team

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If you are buying a new house, you would want to get your head around the difference between home warranty vs home Insurance.

While both aim to protect your house and cover the damages, home insurance covers the structural components of your house. In contrast, a home warranty covers internal components such as home appliances.

While these contracts protect you against different risks associated with home ownership, they are not mutually exclusive. You can get both, one or the other, or neither.

Let’s understand the difference between home warranty vs home insurance and help you make a better choice.

1- What is a Home Warranty
2- Home Warranties Types
3- Home Warranty Cost
4- How to Buy Home Warranty
5- What is Home Insurance
6- Home Insurance Plans
7- Home Insurance Cost
8- Homeowners Insurance vs Home Warranty
9- Frequently Asked Questions

What is a Home Warranty?

Homes are filled with expensive appliances prone to breakdown and often need repair. A Home warranty provides homeowners with peace of mind by covering the repair or replacement of household components such as appliances, heating & cooling systems, plumbing, electrical wiring, and more. If something goes wrong, you can call the company and get it fixed for a fraction of the cost.

It is an excellent option for busy homeowners who don’t have the time to find good contractors to repair their high-end equipment. Or when you’re unsure of your equipment’s reliability and worry about what might break down next.

Home Warranty
Photo Credit: Canva

Home warranties typically cover repairs up to two years from the date of purchase. Still, some policies cover up to five years. You can also choose from different levels of coverage to suit your needs.

The warranty typically covers the cost of repair, labor, and replacement if the item cannot be repaired. The coverage can be up to $15,000 in annual expenses, depending on your chosen plan.

If you have appliance issues and are covered by a home warranty, contact them immediately so the insurer can send someone out to fix your appliance.

Home Warranties are Available in Three Types:

1) Appliance Plan
2) System Plan
3) Combination

The Appliance plan covers specific appliances in your home for a set period.

The System plan is for all the major systems in your home, such as heating and cooling units, plumbing, electrical and more.

A Combination plan covers both the appliances and other systems in your house.

Home warranties are also offered by appliance manufacturers. These are categorized into two types: Comprehensive and limited.

Comprehensive home warranties cover all parts and labor on the appliance, while limited warranties cover only certain parts.

How Much Does a Home Warranty Cost?

A home warranty is a good option and is often cheaper than paying for the repairs. But like any insurance, it’s essential to understand how much you’ll pay upfront and what you’ll get back in return.

The cost of these plans is determined by the type of coverage and the length of time you need it to cover. The price can range from $300 to $1500 annually, depending on whether you want to customize your plan for additional coverage. You may also have to shed a deductible (usually between $50 and $200) when the company visits to repair or replace an item in your home.

The price also varies with different companies. Some offer monthly payments, whereas others provide yearly plans. Monthly payment plans are often more expensive than annual plans, which require you to pay for 12 months upfront.

How to Buy a Home Warranty?

Buying a home warranty can be confusing and frustrating. With so many different companies to choose from and different plans to pick from, it’s hard to know which is the best for you. It’s important to find the best deal that fits your needs perfectly.

It would be best if you considered multiple factors before making a purchase. The first is the length of coverage. Home warranties typically cover between 12 and 24 months, so make sure you purchase one with enough time for your needs.

The next thing to consider is whether or not you need additional features such as plumbing coverage or systems protection. This entirely depends on what type of home you live in and what appliances you have in your house.

One more thing to keep in mind is if the company will cover emergency repairs such as burst pipes or frozen pipes when they are not covered by your homeowner’s insurance policy or if they will cover items that are excluded from homeowners insurance policies, such as jewelry, furs, silverware, etc.

A home warranty can also be purchased as an extension of your homeowner’s insurance policy. However, it is important to know what type of coverage you need before purchasing a plan because there are many different types of plans available today – some cover only major appliances, others cover all appliances and HVAC systems, while others cover everything except for plumbing repairs – so you must know what kind of coverage you need.

What is included in a Home Warranty?

A home warranty can cover your appliances and systems, such as air conditioners, refrigerators, washing machines, and more.

The coverage also includes items such as:

– Electrical Wiring and Outlets
– Plumbing Systems, including Sinks, Toilets, and Pipes
– Roofs, Siding, and Gutters
– Appliances such as Dishwashers and Stoves
– Built In Systems such as HVAC

What is Home Insurance?

Home insurance (also known as property insurance) covers the building and its contents. It provides coverage against disasters such as fire, windstorms, theft, vandalism, or other events that would destroy your home.

You can also choose from the plans designed to cover other risks, offering different levels of coverage.

Home Insurance
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The most popular plan is called HO-3. This includes dwelling, personal property, and additional living expenses.

Dwelling Coverage: It covers the structure of your house and its contents.

Personal Property Coverage: Includes personal items such as furniture, clothes, or jewelry.

Additional Living Expenses: This covers living expenses if you are forced to live elsewhere while your property is being rebuilt.

Here are some examples of home insurance plans:

Standard Home Insurance

Standard home insurance covers the house and its contents against vandalism, theft, and disasters. However, it does not cover any other structures on the property, like fences, sheds, or outbuildings. It also does not cover any personal items that are not inside the house.

Comprehensive Home Insurance

Comprehensive home insurance offers protection for your home, your personal belongings, and your liability against injury or damage caused by you or someone under your care.

Condominium Home Insurance

Condo insurance protects your personal belongings and the building from any damages that may occur during ownership.

Renters Home Insurance

Renters insurance covers your belongings when you rent an apartment or house. It also provides additional protection if your landlord’s policy doesn’t cover your belongings.

It can be purchased separately from your homeowners’ policy (called a “renters rider”). Or it can also be included in your homeowners’ policy as an add-on called “tenant’s liability” coverage.

Vacation Home Insurance

Vacation home insurance covers the cost of rebuilding or replacing your property if it is damaged. It also covers your living expenses if you are forced to live elsewhere while your property is being rebuilt.

Mobile Homes and RVs

Mobile homes and RV insurance is a type of insurance that covers the risks associated with living in a mobile home or recreational vehicle. It is often bundled with homeowners or auto insurance as they typically share common coverages.

How Much Does Home Insurance Cost?

Home warranties are typically an annual contract and can cost anywhere from $300 to $1,000 per year, depending on the type of coverage, the length, and the deductible amount. It is a good deal considering that it covers the cost of repairing or replacing certain household items such as plumbing, heating, and electrical systems.

Getting Home Insurance is ideal if you plan on living in your house for five years or more.

What is Covered Under Home Insurance?

Typically, a home insurance policy covers the house’s structure, including any additions or alterations. It covers the interior and exterior of the house, along with the attached structures like a garage or shed. It also covers your personal belongings inside the house.

Some of the most common damages which can be covered are:

  • Fire or smoke damage to your home, which includes any part of the house, such as furniture, curtains, clothes, and more.
  • Damage to your house from storms like hail, wind, or rain.
  • Damage from vandalism or theft, including broken windows and doors.
  • Your property is damaged by an animal in the house, such as a dog or cat.

How to Acquire an Ideal Home Insurance?

Buying home insurance is the most important decision you will make as a homeowner. The process of purchasing insurance is not as simple as one may think. There are many factors that need to be considered before you sign up with the insurer.

First, you must find out what your needs are. What type of coverage do you need for the property, and your liability, in case something happens?

Depending on these factors, you can determine how much coverage you need and how much money you will have to pay for it. Once you have figured it out, it’s time to decide which company or agency to choose and how much you should it cost

It would be best if you asked for multiple quotes from different insurance companies to help you figure out the best deal. Next, you should check if there are any discounts available for you. This may include discounts for seniors and military personnel.

You can also check if any discounts are available for having smoke detectors in your house or other safety features like deadbolts and security systems.

Nailing the Difference Between Homeowners Insurance vs Home Warranty

We have discussed the different types of home insurance and warranties in detail. A buyer must understand the perks of both and choose wisely.

You can choose homeowners insurance to protect your home against natural disasters, theft, and other property damage. It not only protects homes owners but is also great for condos and mobile homes.


You can choose a home warranty to protect your appliances or HVAC system. A home warranty does not cover floods or earthquakes. Still, it does cover most things, such as appliance breakdowns or system malfunctions like plumbing, heating, or cooling units.

You can also choose both contracts, ie. Home insurance and warranty to get your house secured for maximum protection.

FAQs: Difference Between Home Warranty vs Home Insurance

Do I Need both a Home Warranty and Home Insurance?

The best way to decide which one you need is by analyzing what you want to cover. You should buy a home insurance policy if you want coverage for damage to your house due to natural disasters or theft.

But a home warranty will be sufficient if your goal is to cover appliances and furniture. In case you need comprehensive 360 protection, you can choose both.

Is a Home Warranty Worth It?

For a home warranty to be worth it, you need to answer the following questions:

  • What are you trying to protect?
  • What are the odds that something will happen?
  • How much does it cost?


Homeowners should consider a home warranty if they are not comfortable with the idea of paying for repairs on their own. A home warranty provides peace of mind as well as financial protection.

What is the Average Price of a Home Warranty?

The average price of a home warranty varies depending on the coverage length and the deductible. It lies anywhere between $300-$1500 per year.

Why do I Need a Home Warranty?

A home warranty can help you stay in your home if something unexpected happens, like a plumbing leak or broken appliance.

The average homeowner spends $1,000 on repair costs each year, and homeowners without a warranty spend an average of $2,000 on repairs each year.

Is a Home Warranty the same as Home Insurance?

Home warranties are not the same as home insurance. A home warranty is a service contract that covers repairing or replacing certain household items such as appliances, HVAC systems, etc.

Home insurance is a type of coverage that protects your home and belongings from damage or loss. It covers the cost of repairing or replacing your house if it gets damaged due to natural disasters (floods, fires) or theft.