Coverage Comparison: Home Warranties vs. Homeowner’s Insurance | APHW Skip to main content

Compare coverage: Homeowners insurance vs. home warranties

Blended man and woman hold up cardboard up as a "roof" over their heads with small Blended child sitting between them on a tan living room couch

Many current and future homeowners are familiar with how homeowners insurance can save them money in the long run. But do you know the benefits of a home warranty? It can be difficult to distinguish between the two, so  we’ve put together a guide that explains the different type of coverage each one offers. 

What is a home warranty?

A home warranty is a home service contract that can cover your home’s systems and appliances when they break down due to normal wear and tear. If something breaks down, a home warranty can help you pay for a repair or replacement on a covered item.

You can buy a home warranty directly from a company like America’s Preferred Home Warranty (APHW), or you might receive a home warranty when you purchase a home. The cost of a home warranty, and whether you pay for the home service contract annually or monthly, depends on the provider.


A Black man with glasses makes a puzzled expression with 10 black question marks of different sizes over his head


What is home warranty coverage?

Most home service contract providers focus their home warranty coverage on major home systems (such as plumbing, electrical, and HVAC) and common household appliances (like your dishwasher, fridge, and oven). The home systems and appliances covered under a home warranty depend on the provider and plan you choose, but most offer a standard option along with the choice of a few upgrades, which often include benefits like:

  • Enhanced coverage
  • Lower fees, premiums, or out-of-pocket costs for covered repairs
  • Extended coverage through add-ons

As with any contract, make sure you read and agree to your plan’s coverage before signing, and be aware of any upgrades you may need in the future. Some home warranty companies only provide coverage for items in single-family homes, but other companies may cover more property types, such as condos, townhomes, new construction, and even multi-unit homes!

Do you need a home warranty?

The decision to buy a home warranty is up to you. However, having a home warranty helps you hedge your bets against the potential high cost of repairing or replacing a home system or appliance. Without a home warranty, you could see costs as high as the ones below:

  • Up to $350 for a washing machine
  • Up to $430 for an oven or range
  • Up to $450 for a fridge/freezer
  • Up to $1,200 for a furnace
  • Up to $1,300 for a hot water heater
  • Up to $1,657 for a roof repair

As the saying goes: It’s better to have something and not need it, than to need it and not have it.


A woman in light blue jeans and white sneakers mops up the water coming out of a leaking washing machine


Can you buy a home warranty at any time?

If you already own your home, there’s no need to worry — warranty providers have a wide window of opportunity for you to put a warranty on your home. If you’re house hunting, you can let your real estate agent know that you’d like a home warranty to be included with your home.

If you already own your home, it’s not too late; most home warranty companies protect older homes too, so getting coverage shouldn’t be a problem. 

What is homeowners insurance?

Homeowners insurance is a specific kind of property insurance that helps financially protect your home, assets, and personal belongings in the event of an accident or disaster. According to the Insurance Information Institute, some of these disasters and accidents include:

  • Fire and explosions
  • Hurricanes and windstorms
  • Hail and lightning
  • Vehicle and aircraft damage
  • Theft and vandalism


A White right hand holds a black pen to sign a blue-and-white contract


What does homeowners insurance cover?

Most homeowners insurance policies provide four main types of coverage for their homeowners. You can cover your home itself (including detached structures like a garage, deck, or tool shed) and the personal belongings inside it, like furniture, clothing, and sports equipment.

There is also liability protection to help pay for injuries or property damage that happen to other people on your property, and coverage for additional living expenses, like hotels, meals, and other costs for when you are unable to live in your home due to damage or disaster.

Most standard homeowners insurance policies cover natural disasters like those listed above, but they rarely cover flooding or earthquakes. Additional coverage for these two situations may be required, depending on your location.


A pair of White hands forms an inverted "V" over a red-roofed, gray-and-white house on a white table


If you have homeowners insurance, do you need a home warranty?

If you own your home, you likely also have homeowners insurance, since most mortgages require it as part of the lender agreement. Though homeowner’s insurance protects your home from all kinds of events and disasters, it doesn’t cover your home against normal wear and tear. This is why it’s important to have homeowners insurance AND a home warranty — so they can work together to give you maximum coverage.

Imagine if your dishwasher started to leak and caused floor damage: Homeowners insurance could cover the damage, but may not fix the leak. The home warranty could help you fix the leak, but not the damaged floor. Working together, the two policies could cover everything (less your deductibles), helping you avoid a large portion of the cost of getting these items fixed without them.

This scenario is why so many homeowners choose to protect their home and their budget as much as possible, by having both homeowners insurance and a home warranty. With both of these covering your home, you can enjoy it even more, knowing that you took an important step in avoiding big homeowner headaches.