Home Warranty Vs Home Insurance

Home Warranty Vs Home Insurance. What is the difference? Do you need both?


When purchasing a new home, it’s important to do in-depth research on all facets of the homebuying process. One thing you’ll need to understand is how to best protect yourself and your investment if anything were to go wrong. Check out the information on Home Warranty Vs Home Insurance below to educate yourself on your options.

Home Insurance

Homeowners insurance pays for any accidental damages and loss that are caused by fire, lightning strikes, windstorms, and hail, however, damage from earthquakes and floods is typically not covered. It also covers the replacement of personal property in case of theft or damage and liability if a person were to get injured in your home or on your property. According to American Home Shield, the average annual cost of a homeowner’s insurance policy ranges between $300 and $1,000, and the bank usually asks you to obtain a policy before the mortgage is issued. Make sure to keep in mind that each type of coverage in the policy is subject to a limit and, in most cases, you will have to pay a deductible. Additional coverage can be purchased to cover flood and earthquake. Often times, lenders will require flood insurance if the home is on a flood prone area.

Home Warranty

A home warranty is designed to cover the cost of repairs and replacements of larger appliances and crucial systems in your home that may fail or break due to age and wear and tear. This includes but isn’t limited to HVAC, electrical, or plumbing components, kitchen appliances, and your washer and dryer. With a home warranty, you are required to pay premiums year-round, even if you do not use it, and it won’t cover damages if appliances were not maintained properly or if the damage is from a fire or other disaster. We recommend 2-10 Home Warranty to all out buyers and sellers. They offer a seller policy to cover the home while it is listed and under contract.


You are required by all lenders to get insurance but not required to get a warranty. We, however, recommend getting both for ultimate protection. If you are paying cash for the home, you can “self insure” and not get insurance but why take that risk? We suggest to cash buyers to get coverage as well.

Please reach out to us if you have more questions about the home buying process. We are happy to help!




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