Home insurance vs. Home Warranty, both are great protections to have. Each offers various different types of protection. Understand what each covers and why you should have both.

Home ownership is the one of the best investments you’ll make in your life. Protecting your assets is not only smart—it’s necessary. Purchasing both a homeowner’s insurance policy and a home warranty,  covers your home, belongings, appliances and system components. Understanding the differences of the two products and why you need them can be tricky.

What is homeowners insurance?

A home insurance policy covers any accidental damage to your home and belongings due to theft, storms, fires, and natural disasters. Four primary areas are covered under the policy: the interior and exterior of your home, personal property, loss or damage, and general liability if a person is injured while on your property.

A home insurance policy is mandatory, and banks will require you to obtain one before issuing a mortgage on a home. Insurance policies are renewed yearly and the annual cost is between $300 and $1000. All home insurance policies offer a deductible. After the deductible is paid the policy will then take care of any additional costs.

Say for example, a pipe breaks and floods your kitchen. An insurance adjuster will come to your home and fill out a claim for repair and replacement of any damaged items in your home. When a claim is approved, the insurance company deducts the amount of your deductible and issue you a payment for the rest of balance to repair your home. This deductible also assists in lowering your yearly policy premium. The higher your deductible, the lower your yearly home insurance policy.

What is a Home Warranty?


A home warranty is a service contract that provides repair or replacement of your system components and appliances that fail due to age and standard wear and tear. For example, components of your HVAC, electrical, plumbing, kitchen appliances and washer/dryer are all covered under this warranty. You can also cover larger systems like your pool and spa. Home warranties may have 12-month contract terms. They are not mandatory to obtain a mortgage. Home warranties are purely elective. Appliance and system combo plans can be purchased for around $75 per month. Add-on coverages for items like additional refrigerators or pool systems cost.

Imagine your HVAC system stops working. This would require a licensed, pre-screened technician to come out and check out the problem. If it’s found the system is no longer working because of wear and tear and the breakdown is covered under the terms of your service contract. The service contractor will make the repair. Or if necessary, the contractor will replace the appliance or system for just the cost of your service call. One-time service calls cost (depending on your policy) up to $125, and the home warranty company pays the rest. Home warranties potentially can save you hundreds or even thousands of out-of-pocket dollars and the labor of finding a quality service contractor to make the repairs.

Will I need multiple Homeowner’s Warranties?

When choosing a warranty, consider the premium and optional coverage options to customize the plan to fit your needs. For example, you may want coverage for your second refrigerator or an outdoor pool. These are not typically covered by a standard home warranty.

Life happens and things break. When they do, home insurance combine with a great home warranty will save you time, money and agony.








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