First, what’s the difference between homeowners insurance and a home warranty?
Simply put, homeowners insurance handles all the accidental damages that can happen to the structure of your home—like wind damage, fire, or flooding.
A warranty company, on the other hand, offers home warranties to cover unexpected breakdowns of your home’s systems and appliances due to normal wear and tear. Warranties may cover things like your plumbing, air conditioner, or built-in microwave oven.
Unlike homeowners insurance—which is usually mandatory—home warranties are more like a service contract for appliances or systems that will end up aging or breaking down eventually.
For example, if your toddler uses your dishwasher door as a trampoline and breaks it, a typical home warranty will not cover it. But if your dishwasher door won’t close correctly because the seal has come loose over time, your repair may be covered under a home warranty.