Home warranty vs. homeowners insurance
They cover different things, and most homeowners who want full protection need to understand both.
- TopicHome
- Reading time2 min
Different causes of loss
Homeowners insurance pays for sudden damage from events such as fire, storms, theft and burst pipes. A home warranty pays to repair or replace systems and appliances that fail from normal wear.
An example
If a storm drops a tree on your roof, that is insurance. If your ten-year-old air conditioner stops working in July because the compressor wore out, that is a home warranty claim.
Who requires what
Mortgage lenders require homeowners insurance. Nobody requires a home warranty. It is an optional service contract.
How claims differ
An insurance claim involves an adjuster and a deductible that is often a thousand dollars or more. A home warranty claim involves a service call fee and a contractor sent by the provider.
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