My BLOG November 26, 2022

What’s the difference between Homeowner’s Insurance and a Home Warranty?

Home Warranty Service Agreement vs. home insurance: What’s the difference?

A home is arguably the biggest and most significant purchase an individual or family will make in a lifetime. With a significant purchase comes a substantial list of questions, and one of the most common inquiries builders and real estate professionals will receive is: “What is the difference between my homeowner’s insurance policy and a Home Warranty Service Agreement?”

What a home insurance policy will protect

While homeowner policies vary by provider, they generally cover damage due to identified risks that are sudden or accidental, such as a fire or a natural disaster. In these instances, a home insurance policy will usually cover the damage occurs to personal property inside the home or other major components of the building itself.

How insurance policies differ from Home Warranty Service Agreements

A systems and appliances Home Warranty Service Agreement is a great option that helps fill in the gaps that exist within insurance policies. Separate from your homeowner’s insurance, a Service Agreement for pre-owned homes covers repairs to major systems and appliances in your home that might malfunction or break due to normal wear and tear.

According to the U.S. census, the average annual cost for home maintenance, including system and appliance repairs is 1-3% of the homes purchase price. In addition, there’s a 68% chance that a major system or appliance will fail within one year. Home Warranty Service Agreements help allay repair and replacement costs, and can bring homeowners a sense of relief knowing they’re protected.



by Laurie A. Donofrio