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FAQs About Home Warranties vs. Insurance

HomeHome InsuranceFAQs About Home Warranties vs. Insurance

FAQs About Home Warranties vs. Insurance

How does a home warranty differ from home insurance?

When you buy a home, you may be offered a home warranty to protect against the cost of unexpected repairs.

While both insurance and warranties offer protection against loss and damage, there are some key differences between the two that every homeowner should know.

Find out more about the protection offered by home warranties and home insurance, and learn how they can work together.

What is a home warranty?

A home warranty is a type of service contract for your house. For the time period specified in the contract, the warranty covers the cost of servicing, repairing or replacing appliances and systems covered in the contract.

What is homeowners insurance?

While each homeowners policy can be different, coverage generally falls into four categories:

  • Damage to the structure of your home, garage, etc., caused by a covered peril.
  • Stolen or destroyed belongings inside the home.
  • Liability protection for injuries and other damage caused on your property.
  • Additional living expenses if your home is destroyed by a covered peril.

Are either of them required?

A home warranty is an optional type of protection that the homeowner can elect to purchase. Sometimes, a home warranty is offered with the purchase of the house as a benefit to buyers. Homeowners insurance is required by your mortgage lender for the life of the loan.

Do I need both types of protection?

This depends on your situation. Consider how much you have saved for home repairs, the age of the home and more. A home warranty is a short-term type of protection for specific appliances and home systems, while your homeowners insurance policy covers bigger losses and will stay with you over the years.

Do you have an adequate safety net for your home? Reach out with questions about your policy and we’ll be happy to help!