Homeowners Insurance vs. Home Warranty: What’s the Difference? 

When it comes to financially protecting your home, both homeowners insurance and a home warranty offer valuable coverage, but they serve very different purposes. Knowing the difference can empower you to choose the best protection plan for your home.

What is Homeowners Insurance?

Homeowners insurance is a policy that can help cover the cost of damage to your property and personal belongings caused by unexpected events like fire, theft, storms or vandalism. It typically also includes liability protection in case someone is injured on your property. Most mortgage lenders require homeowners insurance, and it’s designed to help you recover financially from significant losses or disasters.

What is a Home Warranty?

On the other hand, a home warranty is a service agreement that can help cover the cost of repairing or replacing home systems and appliances that break down from everyday use. This might include your HVAC system, plumbing, electrical systems and kitchen appliances. Home warranties are optional and typically renewed annually.

What’s the Difference?

The key difference lies in what each covers. Homeowners insurance typically offers financial protection against sudden, accidental damage, while a home warranty usually helps financially cover breakdowns from everyday use. For example, if a tree falls on your roof, homeowners insurance might help cover the repair. But if your water heater stops working due to age, a home warranty may assist.

Both types of coverage can complement each other. Homeowners insurance can offer financial support for unpredictable catastrophic events, while a home warranty can save you money on routine repairs and replacements.

Learn More

Before purchasing either, review the terms carefully. Understand what’s included, what’s excluded, and any deductibles or service fees. Together, these tools can help you safeguard your home and budget from unexpected costs. For more insurance guidance, contact First Priority Insurance Agency .

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.