Home Warranty vs. Home Insurance

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There are a lot of songs about the power of a home. From "Our House" by Crosby, Stills, Nash & Young to "The House That Built Me" by Miranda Lambert, the importance of home spans a wide variety of genres and generations. But actual life in your home isn’t always in perfect harmony.

From weather-related damage to broken-down appliances, there are plenty of issues that can pop up in your home throughout your mortgage. And no matter how dedicated you are to your monthly home maintenance plan, it never hurts to have a little extra coverage. And no, we aren’t talking about home insurance (although that’s important too).

Outside of your home insurance policy, you have another option to provide your home with even more protection. Learn everything you need to know about home warranties, how they differ from home insurance and which choice is right for you below.

Key takeaways:

  • A home warranty is a separate protection plan from your home insurance policy that provides coverage for your home’s internal systems.
  • There are some gaps in your home insurance coverage, and if you want to make sure you don’t experience any financial surprises, adding on a home warranty may be your best bet.

What’s the difference between a home warranty and homeowners insurance?

Like memorizing the words to a new song, understanding the difference between home warranties and home insurance takes time. Both cover items in your home, have yearly premiums and cover some (but not all) of your appliances. But unlike a home warranty, home insurance doesn’t protect your appliances from damage that occurs from old age or general wear and tear. Home insurance is also required when purchasing a home, while a home warranty is optional.

What is a home warranty?

A home warranty is a separate protection plan from your home insurance policy that provides coverage for your home’s internal systems from typical wear and tear. Think of home insurance like going to the doctor for a checkup and a home warranty like taking care of your body with healthy eating and exercise. While going to the doctor is important, eating right and exercising are great supplements to keep your body running smoothly in between visits.

Home warranties allow you to pay a flat fee for repair services on your appliances, plumbing or electrical systems. Typically, a home warranty program lasts for an entire year and costs an average of $300 to $600 a year (according to Consumer Affairs).

Home warranties allow you to pay a flat fee for repair services on your appliances, plumbing or electrical systems.

What does a home warranty cover? 

Home warranty coverage depends on the type of policy you buy. Most companies offer several plans for total customization, allowing you to only cover your appliances or just your internal systems (or both). Make sure to read the fine print before purchasing a policy because while home warranties cover the repairs of rundown items, they don’t cover the damage they cause to the rest of your home.

When researching a home warranty policy, you’ll have the option to cover some (or all) of the following:

  • Appliances
  • Electrical Systems
  • Hot Tubs
  • HVAC Units
  • Plumbing Systems
  • Saunas
  • Swimming Pools
  • Toilets

Home warranty pros and cons 

Deciding whether or not to get a home warranty comes down to personal preference. While home warranties help minimize extraneous fees related to repairs, they don’t cover everything. To help you determine if a home warranty is right for you, consider these pros and cons:

Home warranty pros:

  • Allows you to pay one flat fee per repair appointment
  • Automates the appointment process for you, making scheduling repairs a breeze
  • Gives you the option to pick your service provider, but can also choose one for you

Home warranty cons:

  • Only covers repairs due to normal wear and tear
  • Won’t cover damage to other parts of your home that are caused by malfunctioning appliances
  • Doesn’t cover your home’s structure, your personal property or your liability
  • Requires a yearly premium

What is home insurance?

Home insurance is a required policy that protects your home’s structure, your belongings and liability from damage that occurs from covered perils. But home insurance doesn’t cover everything, and any damage that occurs to your appliances from old age is on you to fix. That’s when having a home warranty policy can come in handy.

Do I need a home warranty if I have homeowners insurance?

Technically, you don’t have to get a home warranty. And while home insurance is usually required when you own a home, there may be gaps in your home insurance coverage. If you want to make sure you don’t experience any financial surprises, you may want to consider additional coverage options, like a home warranty. It’s worth talking to your insurance provider about their additional endorsements as well. Riders like equipment breakdown coverage can add a lot of the same protection as a home warranty for a fraction of the cost.

Here at Hippo, we know that home is where the heart is. And protecting your heart is our top priority. From full-coverage home insurance plans to insurance riders to fill in any gaps in your policy, a policy with Hippo makes a beautiful melody, ensuring you’ve got coverage for every portion of your home.