A home warranty is often mistaken for homeowners insurance, but the two offer completely different coverage and advantages.
A Home Warranty
A home warranty is a one-year policy that covers the repair or replacement of most major appliances and home systems that breakdown over time due to normal wear and tear. Policies cover a variety of things from washing machines to HVAC systems, and generally require a set deductible for repair visits.
Contrary to a home warranty, a homeowners insurance policy provides coverage for bigger, often more expensive, issues. Depending on your policy, insurance covers everything from natural disasters to kitchen fires.
A simple way to remember the difference is to think of your car. Your warranty and insurance offer different protection services, just like they do on your house. Your car insurance takes care of the big stuff, while the warranty generally takes care of maintenance and wear and tear items.
While homeowners insurance and a home warranty are different, it’s beneficial to have both types of coverage for your home in case anything ever happens.