February 28, 2018 | Home Tips

What's the difference between a warranty and home insurance?

Questions regarding home warranties and insurance policies are frequently asked by new homebuyers and home owners. What is the difference between a home warranty and home insurance, and do you need both? Our partners at North American Advantage Insurance Services explain the differences and benefits of each.

Despite common misconceptions, there is a difference between a home warranty and a homeowner's insurance policy, and each provide a different level of coverage. Home warranties are similar to insurance, but different in that they act as a service contract, covering both the repair and replacement costs of home appliances. These warranties are relatively inexpensive, depending on how much coverage you opt for. If you obtain a mid-range home warranty, you can expect the majority of your appliances to be covered.

In contrast, homeowner's insurance policies do not provide your appliances with coverage, unless they are damaged in a covered peril. For example, if your washer and dryer were damaged during a storm, your homeowners’ insurance would kick in to provide you with coverage. Separate from your homeowner's insurance, a home warranty covers major systems and appliances in your home that malfunction or break due to normal wear and tear. 

Contact North American Advantage Insurance Services for all of your homeowners' insurance needs. Serving 23 states, NAAIS has deep industry experience and will be able to help you secure the best coverage for the most competitive pricing. As your independent insurance agency, they will go above and beyond as your advocate!

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