How is a home warranty different from home insurance?
A home warranty is a service contract for systems and appliances that wear out. Home insurance covers sudden damage such as fire or storms.
They cover different problems. A home warranty is a service contract that pays to repair or replace home systems and appliances that break down through normal use. Home insurance covers sudden, accidental damage, like fire, storms or theft.
Home warranty
- Covers breakdowns from wear and age
- Usually covers listed appliances and systems only
- You pay a service fee per call
- The provider often chooses the technician
Home insurance
- Covers sudden events named in the policy
- Covers the structure and often your belongings
- Includes liability cover
- May be required by a mortgage lender
Where they don’t overlap
A furnace that dies of old age is a warranty question. A furnace damaged by a burst pipe may be an insurance one. Neither typically covers neglect or poor maintenance.
Product warranties
A manufacturer’s warranty on a single item promises to fix defects for a set time. It sits alongside both.
More in the warranty guide. General information only, not legal or financial advice. Consumer rights differ by country and state, and your contract’s wording governs.