Property insurance vs warranties: what are the differences?


Many small business owners make the mistake of thinking premises insurance is the same as their home warranty. We outline the differences.

One of the major differences between home warranty and property insurance is the coverage. A home warranty provides coverage for home appliances and home systems damaged because of normal wear and tear.  The property insurance includes financial losses related to the property. Let’s continue the warranty vs. insurance in a more detailed manner. 

Home warranty vs. insurance: overview

Property insurance covers and protects the property against various events such as:

  • Smoke 
  • Theft 
  • Natural Disasters 

While a home warranty plan includes repair or replacement of home appliances and systems caused because of normal wear and tear. Here’s a comparison table between the two to make things more clearer to the property owners. 

Home Warranty Property Insurance
Includes damages caused because of normal wear and tear  Includes damages caused because of unforeseen circumstances 
Coverage is offered to the internal home elements  Coverage is offered to the structural property, and personal belonging 
Helpful in case you have old home systems and appliances  Mandatory if you want to take a home mortgage
Not properly regulated  Well regulated 

Going forward, we will compare the coverage, cost, and more for each option.

Coverage of a home warranty 

The plans offered by various home warranty companies are different from one to another, but the typical coverage mainly includes:

  • HVAC
  • Electrical system
  • Plumbing system 
  • Water heater 
  • Kitchen appliances 
  • Clothes washer and dryer
  • Garage door opener

Home warranties have certain limitations on the payout for each appliance and home system. As they have a specific amount set for coverage of your broken item, you will have to spend money from your pocket if any extra expenditure is incurred. 

Another point that you should consider here is that some components might not come under the warranty eligibility. You can stay careful by reading the terms and conditions before applying for one. 

Who Should Go For A Home Warranty?

  • Homeowners with old appliances or HVAC systems 
  • If you are new to the area and don’t know any service technician 
  • Homeowners who don’t want to risk their savings 

Who Should Not Go For A Home Warranty?

  • Homeowners who have new appliances with manufacturer warranties
  • People employed in the same sector 
  • Those looking to avoid any exclusion risks

Pros Of A Home Warranty Coverage 

  • A decent way to save on expensive repairs 
  • Licensed service contractors 
  • Live hassle-free 

Cons Of A Home Warranty Coverage 

  • Pre-existing conditions not included 
  • May not be for the homeowners with a newly built home 
  • Claim denials 

What Is The Cost Of A Home Warranty?

The price is different depending on one company to another. Various factors that affect it include the home’s size, location, the selected plan, and more. A typical warranty can range from $30-$75, while an annual premium can go up to $700. 

Along with the monthly premium, you will also have to pay a deductible every time you take the services of their technician. It can range from $50-$200 depending on the company’s policies. 

The warranty has ongoing discounts and offers that can help you save money. Some home warranty companies whose plans you should check include Select Home Warranty, Choice Home Warranty, and ServicePlus Home Warranty. 

How To Select A Home Warranty?

There are various things that you will need to keep in mind whenever choosing a plan:

  • Do in-depth research 
  • Compare online quotes 
  • Read the home warranty contracts carefully 
  • Affordable plan options 

Coverage of property insurance 

The property insurance coverage is different from one state to another, but, here are the general inclusions: 

  • House structure 
  • Personal property 
  • Jewelry (to a certain extent)
  • Natural disasters and expenses 
  • Liability claims 

These are some of the specific inclusions, however, most home insurance companies don’t cover damages because of pest infestations or mold. Also, they don’t include water damage caused because of floods or any structural damage. Any damage because of negligence or lack of maintenance also isn’t covered by property insurance. 

You should thoroughly read the contract to know about the inclusions and limitations of your plans. It will help you properly understand the details and make the right decision. 

Who Should Go For Property Insurance?

Who Should Not Go For Property Insurance?

  • People who can’t afford any extra expense 
  • People who want protection against normal wear and tear 

Pros Of Property Insurance 

  • Liability coverage 
  • Includes damages caused by accidents, disasters, and natural calamities 
  • Eases financial stress 

Cons Of Property Insurance 

  • Expensive 
  • Many factors can cause an increase in the premium rate 
  • Doesn’t include issues with the maintenance 

How Much Does Property Insurance Cost?

Property insurance costs can also vary like home warranties. It is mainly dependent on the property’s size, its condition, and more. The average annual home insurance can cost approximately $1249, which is approximately $105 monthly.  Companies offering property insurance also charge deductible amounts that can be somewhere between $500-$2000. 

How To Choose The Best Property Insurance?

Here are some of the considerations that you will need to keep in mind when looking to purchase property insurance:

  • Research thoroughly 
  • Get the required coverage 
  • Read the fine print 
  • Compare the ongoing rates in the market 


Home warranty and property insurance are two different products and there can’t be one favorable for the homeowners. Both of them offer exclusive and complete protection for your home and property. You should choose both in case you want to experience the best protection. 

When it comes to purchasing a home warranty or property insurance, one thing that you shouldn’t forget is proper research. Read the documents carefully so that you don’t have to face any kind of problem in the future. 

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