home warranty vs. homeowners insurance: what’s the difference?

When it comes to comparisons, home warranty vs. home insurance may not be as exciting as, say, Batman vs. Superman or potato vs. po-tah-to. But it's still pretty important. Find out what separates these 2 products so you can get the right sort of protection for your abode.

what is a home warranty?

A home warranty is a type of protection that usually applies to household systems and appliances. This can refer to a number of items that vary by policy, such as:

  • AC units
  • Heaters
  • Plumbing
  • Pools
  • Dishwashers
  • Electrical wiring
  • Garage door openers
  • Smoke detectors

Home warranties are typically purchased by the seller of a house to ease the minds of buyers — a way to say, "In case something goes wrong just after I turn the keys over, you won't get stuck with the bill." And given how much scrutiny goes into inspecting a home, having the peace of mind of a home warranty can be just what you need to pull the trigger on a new pad.

why a home warranty doesn’t replace homeowners insurance

While a warranty is nice, no question about it, it's not the same as having homeowners insurance (sorry to burst your bubble).

There are some key differences between a warranty and a home insurance policy.

Warranties expire

While it could vary depending on the company, most home warranties are good for only one year (so live it up while you can!). Once yours expires, the cost to fix leaky plumbing or replace your high-tech oven will once again fall to you.

With homeowners insurance, as long as you pay your premium regularly and remain a responsible property owner, you can usually renew your policy for as long as you wish.

Your home's structure is usually only covered by insurance

Although there are such things as structural warranties (only for newly constructed houses in most cases), your main dwelling, carport, shed, and other structures are typically yours to protect.

Most warranties won't kick in if, say, high winds tear a hole in your roof, a tree crashes through your window, or a car careens into your sun porch. With homeowners insurance, however, you won't have to burn through your hard-earned savings to repair such damage.

Home insurance could even help pay for living expenses (like food and a hotel) if you have to relocate temporarily so your house can be repaired after a covered incident, another perk not included in a warranty.

A home warranty doesn't cover your belongings

Unless you consider your washing machine a treasured family heirloom, a home warranty doesn't really protect your important possessions. Rather, if a burglar swipes your jewelry or a fire reduces your antique grandfather clock to ashes, it's homeowners insurance that helps cover their replacement.

Liability issues

Even the most comprehensive and lasting of warranties would only cover the inanimate, such as appliances. But what happens when people are the source of your worries?

Say a visitor gets hurt tumbling down your stairs or slipping on your entryway rug. With only a home warranty, you'd be left to handle any financial fallout on your own dime. But with liability coverage through homeowners insurance, you can get help paying for medical bills of injured guests that you're responsible for and even your legal fees if injured parties decide to sue.

Fix-it freedom

If you ever have a claim that could fall under either your home warranty or insurance, such as a water backup, you may prefer to handle it through insurance. Why? Because in order to, say, fix a sump pump through your warranty, you'll need to live with whatever repairperson your warranty company chooses.

Handling claims through your homeowners insurance, however, tends to allow greater freedom. You'll often have the ability to select the plumber, electrician, or contractor that you like best. In some cases, there may be no network restrictions at all.

get your home all the protection it needs

It's hard to find a substitute for the wide-ranging protection you get from home insurance. Whether you need coverage for your home's structure, your valuables, or your liability, a reliable policy from Esurance has your back. Speak with one of our licensed agents or get your free quote online to start arranging your ideal home policy today.

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