What is the Difference between a Home Warranty and Home Insurance?

The terms “home warranty” and “home insurance” will come up for new and existing homeowners. Both terms include a type of protection for homes and homeowner belongings within them.  However, when it comes to home warranty vs home insurance for your home, these two terms are quite different. To ensure the best home protection at an affordable price, every new and current homeowner should understand home warranty vs home insurance.

What Does Home Insurance Cover?

As a rule for issuing a mortgage, the vast majority of lenders typically require a minimum amount of homeowners insurance. That is, for the lender, having home insurance reduces the risk of loan default because in the event of covered damage, mortgage payments will remain affordable. Homeowners insurance pays for damage and loss caused by such events as various types of damaging weather, fire, theft, and vandalism. If damage or destruction to a portion of a home is the result of one of these events, home insurance policies will provide coverage for rebuilding and/or replacing the damaged and lost belongings. For example, if a wind storm knocks a telephone pole through the living room window, a home insurance policy would help with repair and replacing the covered damaged items.

* It is important to note that if a device like your refrigerator suddenly stops working for no natural disaster reason, a home insurance policy would not cover repair or replacement.

What Does Home Warranty Cover?

A home warranty, or home service agreement, is a plan that protects homeowners from unexpected repair costs for appliances and various systems that would not normally be covered under home insurance or manufacturer’s warranty. It can be viewed as protection for unforeseen repair bills. A home service agreement provides protection for the unexpected.

A home warranty protection plan can include, but is not limited to, major appliances, devices, and systems such as:

  • Central air conditioning and heating
  • Interior electrical
  • Plumbing
  • Water heater
  • Range/Oven/Cooktop
  • Refrigerator
  • Dishwasher
  • Washer and Dryer
  • Garage door opener
  • Ceiling fans

It’s also possible to add-on coverage for plumbing, interior electrical, water/sewer lines, central heating/cooling, well pumps, electronics, and much more! It’s the perfect protection for normal wear and tear.

Home Warranty vs Home Insurance

Home insurance is typically a requirement by the lender, however a home warranty is an optional insurance. Homeowners should not consider it as home warranty vs home insurance, but instead  whether to get extra peace of mind when they buy a home warranty while having home insurance. Home insurance will help to pay for structural damage and loss of personal belongings from covered emergencies, but a home warranty covers repairs and replacements of a home’s systems and appliances when they fail from old age and normal wear and tear.

Home warranties provide protection against unexpected repair costs and replacements for your appliances, devices, and home systems that would NOT normally be covered under a manufacturer’s warranty or homeowner’s insurance. With regards to home warranty vs. home insurance, the essential point to remember is home insurance covers unexpected specific events that result in loss and damage, while home warranties cover events that are somewhat expected, such as aging and normal wear and tear. In addition, while individual items may initially be covered under manufacturers’ warranties, they only last for a specific period of time. Home warranties provide protection no matter the age of the appliance, device, or system.

Reliable Home Protection Plan Coverage

ARWHome is a one-stop shop providing home warranty coverage not only for major home appliances and systems, but also for new and existing home and computing entertainment products like cell phones, laptops, tablets, flat screen TVs, surround sound systems and gaming consoles through our Ultimate Electronics Protection Plan.With ARWHome protection plans, homeowners experience prompt and professional customer service, immediate service for emergencies issues, and efficient response to a request for service within 24-48 hours.  ARWHome has a large network of licensed, pre-screened and pre-qualified technicians.

ARWHome warranty plans offer coverage for current and aging home systems and appliances, regardless of make, brand, age or model in order to protect against possible future repair costs. There are no long-term contracts so you may hold a policy for as little or for as long as you would like. Homeowners have peace of mind knowing they are covered by ARWHome protection plans along with their standard home insurance.