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Ashley Sharum

The Difference Between Home Insurance and a Home Warranty

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. So, what is the difference between home insurance versus home warranty:

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. The average annual cost of a homeowner's insurance policy ranges between $1,200 and $1,800, 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.

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 yearly premiums (about $450 - $750), 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.

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