If you own a home or are thinking about purchasing one, you may be wondering what the difference is between a home warranty and home insurance.

Different sorts of protection are provided by home warranties and home insurance plans. Knowing what each one covers can help you choose whether you require both.

A home warranty covers the repair and replacement of household equipment and systems such as the HVAC, plumbing, and electrical systems at a reduced cost.

Home insurance protects your home and personal belongings from major hazards such as fires, windstorms, and theft. It also protects you from liability if someone is injured on your property.

If you have a mortgage, your lender may compel you to purchase homeowners insurance. It is optional to purchase a home warranty.

Consider purchasing both a house warranty and a home insurance policy for the most peace of mind.

A home warranty is a service contract that assists in the payment of repairs and replacements for eligible household appliances and home systems.

You get a flat rate on service calls in exchange for a monthly or annual fee.

If an appliance or system covered by your plan fails, your home warranty company dispatches a specialist to diagnose and repair the issue—and you only pay the service call cost.

These plans have the following coverage limitations: A contract may cover up to $1,500 per year for each qualified equipment, with a $15,000 annual claim maximum.

If you acquire a home warranty as part of a real estate transaction, the coverage normally begins the day you close on the house.

Home insurance is a type of property insurance that covers losses and damages caused by covered dangers.

The most popular home insurance policy is the HO-3, which covers your home, belongings, and liability. 

Home insurance also protects you against personal liability for injuries to others (those who do not reside with you) and their belongings while they are on your property.