If you’re a homeowner, protecting your property and budget from unexpected expenses is always a smart move. Two common types of coverage that often get confused are home warranties and homeowners insurance.

While they may sound similar, they serve very different purposes.

Homeowners Insurance
Homeowners insurance is typically required by mortgage lenders and is designed to cover your home and belongings in case of damage or loss due to events like fire, theft, storms, or accidents. It also provides liability protection if someone is injured on your property. This type of coverage helps you recover from major events that can cause significant damage or disruption.

Home Warranty
A home warranty is a service contract that covers the repair or replacement of home systems and appliances that fail due to normal wear and tear. That includes things like your HVAC system, refrigerator, water heater, washer and dryer, and more. It’s not insurance, but it can be a financial safety net when everyday items stop working.

A simple way to think about it is this:
Homeowners insurance helps you when a tree crashes through your roof. A home warranty helps you when your dishwasher suddenly quits or your AC stops blowing cold air.

While one doesn’t replace the other, they can work well together. Insurance protects you from the big, unexpected disasters. A home warranty can help with routine breakdowns that are bound to happen over time.