First-time buyers often get confused is homeowners insurance vs. home warranty because of almost similar features which it offers. However, there are so many big and small-scale companies that offer both the services together but the perks that every service offer to the buyer are different. To be precise, homeowner’s insurance covers the entire home and not the appliances present in it. This means, if there is any damage that hampers to the appliance during the flood or fire, then insurance may not be able to cover it. But in the case of a home warranty, it covers different appliances and not the home. It is usually used when there is a wear and tear of the most often used product or electronic appliance takes place. If the product gets damaged and there is either a repair or replacement then such a warranty can be used.

Are home warranty and home insurance the same?

This is the most common concern that usually people come up with. But the basic difference itself is the coverage they offer. Elements that are in the interior of the home such as systems, appliances, and maintenance services are covered under a home warranty. In the case of home insurance, it is the overall structural aspects and the whole property that is being covered.

The coverage that home warranty offers:

There are some items that the home warranty covers. This can again vary as per the plan and company. However, there is a typical coverage that includes:

l  Clothes washer

l  Electrical system

l  Water heater

l  Heating, ventilation, and air conditioning system (HVAC)

l  Plumbing system

l  Kitchen appliances

l  Garage door opener

There are also some optional coverages such as spas, pool, and well pumps that can be covered but for this additional fee needs to be paid.

Limitations to not ignore:

Even if the option of home warranty offers some of the best coverages but there are some limitations too. A home warranty company usually has a predetermined amount. It has been set to cover the broken item and it does include if any additional expenses, then the owner needs to pay for it.

Advantages and drawbacks of home warranty

l  Skilled service contractors

l  Better saving on expensive repairs

l  Peace of mind


Often exclusions lead to claim denials

Items based on pre-existing conditions don’t get covered

The coverage that homes insurance offers:

The policy of home insurance again varies as per the state of the resident and even the policy type. Usually, it covers:

  Contents of the house

l  Structure of the house

l  Personal property

l  Jewellery up to a certain value

l  Living expenses as a result of a natural disaster

l  Events like theft, fire, and lightning

Limitations to not ignore:

Along with some of the best coverage, there are some limitations to home insurance. Usually, companies don’t offer coverage against the damages due to mold and pest infestations. It also doesn’t cover the water damages that happen because of floods or earthquakes. Any act due to faulty construction or negligence of someone is also not covered.

Advantages and drawbacks of home warranty


  • Relieves financial stress
  • Offers liability coverage
  • Covers damage due to accidents and disasters


  • Can be Pricey
  • Factors like credit history can increase the rate of premium

How much does the home warranty cost?

The overall value of the home warranty entirely depends on the different factors such as home size, location, and plan were chosen. Usually, a home warranty can cost between $30-$75 per month and if it is the manual premium it can vary between $350-$700. It is better to always research more on different types of plans, coverage, and the budget that fits the requirement.

How much does home insurance cost?

Home insurance prices can also vary as per the size, location, and condition of the property. Usually, the annual average cost is $1,249 which can often go to a monthly cost of $105 or so. Such companies also charge deductible amounts that may range from $500-$2000. It is possible to even adjust the monthly premium. It is better to always research more on different types of plans, coverage, and the budget that fits the requirement before making any kind of decision.

How to make the choice amongst the best?

Whether it is the home insurance or home warranty that is finalized, eventually it is important to coordinate with experts from this field. Other than this, while making the choice amongst the professional company, it is better to:

Make good research: this would boost much knowledge and give clarity on whether the insurance is advised or warranty can be suitable for the needs.

Get feedback: Once the companies that offer both the services are shortlisted, it is better to get feedback from users and clients who have opted for it. This would give clarity on whether there is any kind of hidden charges that the company usually puts or not.

Meet and know the plans: Different premiums and coverage are being offered and this can vary as per the company that is being chosen. That is why it is better to choose the best ones. It is always better to look for the one that offers a cost-friendly solution with better coverage and thus allows a stress-free time.

Compare different companies and then make the choice as competition has increased to a great extent and it is quite challenging to rely on the very first instance itself.


Homeowners insurance vs. home warranty argument will not end. But both are different services and can be best used if they are both purchased. Both the investments are worth it. However, the risk of home damage is moreover the electrical appliances. That is why, if budget is the issue and there is a dilemma which one from either of the options should be chosen then it is better to look for the homeowners’ insurance. But if there are some large appliances that are often being used and are at high risk of getting damaged then protecting them with a warranty is advised.