Home Warranty vs. Home Insurance: Key Facts

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Key Takeaways

When it comes to understanding the nuances of a home warranty vs. home insurance, it's important to read the fine print.
Home warranties typically cover everyday wear and tear for specific items and are purchased separately from a warranty provider. Home insurance offers financial protection and helps cover accidental damage to your home, belongings or visitors.
Since it covers different things, a home warranty is not a replacement for a homeowners insurance policy.

What Is the Difference Between a Home Warranty and Home Insurance?

They sound similar, but there are key differences between homeowners insurance vs. a home warranty that many homeowners should know. A home warranty provides more limited protection, helping to cover normal wear and tear of certain appliances and major home systems. Home insurance, on the other hand, helps cover damages to your home and personal belongings from unexpected events and covered losses like fire, wind or theft. It also includes liability coverage to help pay for injuries or property damage you're found legally responsible for, up to your coverage limits. In many cases, your mortgage lender will require you to have home insurance vs. a warranty.

Another important difference between home insurance vs. a home warranty is that without homeowners insurance, you'll have to pay to repair or replace your home's structures and belongings completely out of pocket if they're damaged.

couple happy knowing the difference between homeowners insurance vs home warranty

Is a Home Warranty the Same as Home Insurance?

Not quite. While both can be beneficial, the difference between a home warranty and home insurance is that a homeowners policy provides more robust coverage to help cover your entire property and belongings, while a warranty will only apply to certain appliances or systems.

Home Warranty	Home Insurance
Optional contract you can purchase to help pay for home repairs or replacements in certain situations.	A policy, required by most mortgage lenders, that helps protect you, your home and your things.
Covers against wear and tear.	Doesn’t cover wear and tear but does cover things like fire or theft.
Applies to specific items or systems, like refrigerators or air conditioners.	Applies to your entire property, from other structures that are detached, like a shed, to personal possessions. Also provides coverage to protect yourself from liability claims.
Usually requires service fees at a set price.	Requires a deductible that you can customize.

Benefits of Homeowners Insurance

So, if a home warranty is not a replacement for home insurance, then what does homeowners insurance cover? Homeowners insurance can provide peace of mind knowing your home and belongings are covered when unexpected events happen. Specifically, your policy helps pay for repair or replacement costs after a covered loss.

Typically, standard homeowners insurance coverage offers protection from:

Fire
Lightning
Smoke
Theft
Vandalism
Weight of ice or snow
Certain natural disasters, like hailstorms

Events that are typically not covered by home insurance include normal wear and tear, pest damage from vermin, rodents, etc. and floods. However, you can purchase a separate flood insurance policy through the National Flood Insurance Program (NFIP).***

AARP® Home Insurance from The Hartford¹ offers customizable coverage options to protect the unique investment you've made in your home. Get a quote online or call The Hartford today at 877-422-2345.

What Does a Home Warranty Cover?

When comparing a home warranty vs. home insurance, it’s important to know that a home warranty covers the repair and replacement of major appliances and systems in your home. You can decide to purchase a service contract from a home warranty company to get this type of coverage.

Covered appliances under a home warranty plan typically include:

Refrigerators
Washers
Dryers
Ovens
Water systems
Plumbing systems
Electrical systems

kitchen of home protected by owners knowing the difference between home insurance vs warranty

Home Warranty vs. Home Insurance – Do I Need Both?

It’s always a good idea to have home insurance. It covers far more than a home warranty and is often required by mortgage lenders anyway. Whether you choose to also purchase a home warranty is ultimately up to you and your specific needs. A home warranty can help provide protection against wear and tear, which most home insurance policies don’t cover.

Frequently Asked Questions About Home Warranty vs. Homeowners Insurance

Do I Need Homeowners Insurance?

Homeowners insurance isn't typically required by law in most states. However, most mortgage lenders require you to have a homeowners insurance policy if you have a mortgage on your home. Even if you don't have a loan, it's still a good idea to get insurance. Otherwise, you’ll have to pay out of pocket for any expensive repairs or replacements needed for your home or things, and you’ll also be without liability coverage.

Do I Need a Home Warranty?

Home warranties are optional and provide additional coverage. You may consider purchasing one to help protect your appliances, especially if they are older. Typically, standard home insurance policies don't cover damages from general wear and tear.

Can You Use Home Insurance and Home Warranty at the Same Time?

Yes, you can have a home warranty and home insurance policy at the same time. However, whether you can use them at the same time after an incident or accident depends on the fine print of each policy. Typically, they are covering different situations.