What is the Difference Between Home Warranty & Home Insurance?

Dated: May 21 2020

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When purchasing a new home, it’s important to do in-depth research on all facets of the homebuying process. One thing you’ll need to understand is how to best protect yourself and your investment if anything were to go wrong. Check out the information on home insurance versus home warranty below to educate yourself on your options.

Home Insurance

Homeowners insurance pays for any accidental damages and loss that are caused by fire, lightning strikes, windstorms, and hail, however, damage from earthquakes and floods is typically not covered. It also covers the replacement of personal property in case of theft or damage and liability if a person were to get injured in your home or on your property. According to American Home Shield, the average annual cost of a homeowner's insurance policy ranges between $300 and $1,000, and the bank usually asks you to obtain a policy before the mortgage is issued. Make sure to keep in mind that each type of coverage in the policy is subject to a limit and, in most cases, you will have to pay a deductible.

Home Warranty

A home warranty is designed to cover the cost of repairs and replacements of larger appliances and crucial systems in your home that may fail or break due to age and wear and tear. This includes but isn’t limited to HVAC, electrical, or plumbing components, kitchen appliances, and your washer and dryer. With a home warranty, you are required to pay premiums year-round, even if you do not use it, and it won’t cover damages if appliances were not maintained properly or if the damage is from a fire or other disaster.


This article was written by Jay Cottrell, Affiliate Broker with eXp Realty LLC. The content is based solely on the opinions of Jay Cottrell and not those of eXp Realty.  

Required Brokerage Information:  eXp Realty, LLC | 3200 W. End Ave, Suite 500, Nashville, TN 37203 | 888-519-5113

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Jay Cottrell

EXPECT MORE. Growing up in Northeast Tennessee it has been a passion of mine to help others. I have over 15 years of experience in building and running successful companies. As well as over 7 years of....

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