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4 Differences Between a Home Warranty and Home Insurance

Written by Posted On Wednesday, 03 August 2016 07:07

When you own a home, you may often hear about a home warranty and homeowner's insurance. While they sound similar and are important protections to have, these are actually two different home protection policies. If you're curious about the differences between the two, keep reading to find out more.

What Does Homeowner's Insurance Cover?

Image via Flickr by Jason Pratt

Homeowner's insurance protects both the homeowner and the lender from complete financial loss due to unexpected and accidental damage to the house. This damage can come from fire, theft, storms, and other types of natural disasters. Homeowner's insurance covers four main areas: personal property, the structure of the house, general liability against an injury happening to someone on your property, and additional living expenses.

For example, if a pipe breaks in your house and floods your basement, an insurance adjuster will come out and complete a claim to repair the pipe and fix the damage the flood caused to your house and your items. After claim approval, your insurance company will subtract your deductible and issue you payment for the balance.

What Does a Home Warranty Cover?

While homeowner's insurance covers a lot, it doesn't cover the breakdown of appliances or systems in your home. This is when a home warranty comes in handy. It provides for the replacement or repair of your appliances or other system components that fail due to regular wear and tear or age. This can include household appliances such as your refrigerator, stove, washer, or dryer, as well as the plumbing, electrical, and HVAC components in your house. It can also include outdoor systems like a pool or spa.

In this case, consider what happens if your refrigerator breaks down. A licensed technician comes to your home and looks at your refrigerator. If he or she determines that it's no longer working because of age, wear or tear, a service contractor will make the repair or replace the appliance with a new one. You simply pay for the service call, and the home warranty pays for the rest.

Which One Is Required?

While both homeowner's insurance and a home warranty are important to have, only one is actually required. Homeowner's insurance is usually mandatory, and most lenders won't issue a mortgage without one. On the other hand, a home warranty from TotalProtect is elective and used to help give homeowners peace of mind when it comes to their appliances and other home systems.

How Long Do They Last?

A home warranty typically has a 12-month contract period, and homeowner's insurance usually renews once a year. If you purchase a house that has an existing home warranty, it's often included as part of the deal. On the contrary, homeowner's insurance does not transfer, and you would have to purchase your own when buying a house.


While both homeowner's insurance and a home warranty provide protection to your home, they don't cover the same occurrences. However, understanding the differences between the two can help you decide if you need both.

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