Home Warranty vs. Home Insurance: What’s the Difference?
Last Updated on April 25, 2025 by Patricia Omishakin
When buying a home, one question often comes up: What’s the difference between a home warranty and homeowner’s insurance? In this blog post, inspired by my video “Home Warranty vs. Home Insurance | What’s the Difference?”, I break it all down so you can feel confident in your coverage choices as a homeowner in Middle Tennessee.
🏠 What Is Homeowner’s Insurance?
Homeowner’s insurance is mandatory if you’re buying a home with a mortgage. You’ll need to secure it before closing. This policy protects your home against major risks like:
- Fire
- Wind or hailstorms
- Lightning strikes
- Theft
- Liability if someone is injured on your property
It typically also covers the replacement of personal property (like furniture or electronics) and offers liability protection. However, standard policies don’t cover floods or earthquakes—you’ll need separate policies for those.
💡 According to Bankrate, the average annual cost of homeowners insurance in Tennessee is around $1,400, but it can range from $300 to $1,000+ depending on your home’s value and deductible.
👉 Pro Tip: Want lower premiums? Opt for a higher deductible (just make sure you have enough saved to cover it in case of an emergency).
🧰 What Is a Home Warranty?
Unlike insurance, a home warranty is optional—but it can provide major peace of mind, especially for older homes. A home warranty is a service agreement that covers the repair or replacement of major systems and appliances inside your home, like:
- HVAC (heating & air)
- Plumbing
- Electrical
- Water heater
- Dishwasher, oven, washer/dryer, fridge
You can also purchase add-ons for:
- Pools/spas
- Second refrigerators or deep freezers
- Septic systems
How It Works:
- Something breaks.
- You contact your home warranty provider.
- They send out a contractor to diagnose the issue.
- If it’s covered, they repair or replace it.
⚠️ Heads up: There’s typically a service call fee ($75–$150 per visit), even if multiple items are fixed during the same trip. If the repair fails shortly after, many companies will fix it again for free within a certain timeframe (usually 30–60 days).
💲 Expect to pay $300–$700 annually for a basic plan, with add-ons costing $100–$300 more.
🔍 Which One Do You Need?
| Feature | Homeowner’s Insurance | Home Warranty |
|---|---|---|
| Required for mortgage? | ✅ Yes | ❌ No |
| Covers home structure? | ✅ Yes | ❌ No |
| Covers theft & fire? | ✅ Yes | ❌ No |
| Covers appliances? | ❌ No | ✅ Yes |
| Covers HVAC & plumbing? | ❌ Limited | ✅ Yes |
| Cost | $300–$1,000+/year | $300–$700+/year + service fees |
Real Talk from Pat:
When I bought an older home, a home warranty saved me big—especially when my washer was replaced at no extra cost. But when I purchased a new construction home, I skipped it because the builder already included coverage. Your choice should depend on your home’s age, systems, and your budget.
✅ Final Thoughts
- Home insurance = Must-have.
- Home warranty = Nice-to-have.
Both serve very different purposes but are important tools to protect your investment and give you peace of mind.
Have questions or wondering which is best for your home purchase? 📲 Call or text me anytime at 615-730-0037 or Schedule a Strategy Session and let’s talk through your options.
❓ FAQ Section
Q: Can I get both home insurance and a home warranty?
A: Absolutely! Many homeowners choose both for full coverage—insurance protects your home structure, while the warranty handles wear and tear on internal systems.
Q: Is a home warranty worth it for a brand new home?
A: Probably not. Most new homes come with builder warranties covering major systems for 1–10 years.
Q: What if my claim is denied by the warranty company?
A: Read the fine print—some exclusions apply. If denied, you can escalate your case or consider switching companies.
Q: Can I pick my own contractor with a home warranty?
A: Usually, no. Most warranty providers use their own network of service professionals.
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