Most people know when they buy a home that they must have home insurance.  The bank makes this a necessity.  You can’t get the loan if you don’t have insurance. What some people may not know is it’s a good idea to pair that with a Home Warranty.

But shouldn’t my homeowner’s insurance pay for everything?

The short answer is NO.

Generally, homeowner’s policies protect the home from sudden and accidental damage not otherwise excluded.   Fires, wind, and trees striking the home are things that the typical home insurance policy will cover.  Some policies will also cover a sudden and accidental release of water from the plumbing system.  However, most will not cover damage to the part of the plumbing system that failed.

A home warranty can cover major appliances and systems in the home.  Say you buy a home and six months later the furnace fails, this can be a very costly expense.  According to Home Advisor, the national average to install a furnace is $4,203.

The home insurance policy excludes the wear and tear to the furnace and would not provide coverage. A home warranty would cover the replacement minus the service fee.  This, of course, is subject to the terms of the home warranty and selections made at the time of purchase.

Some of the items that a home warranty can cover:


  • Air conditioning
  • Heating
  • Ductwork
  • Electrical
  • Plumbing
  • Water Heaters
  • Appliances
  • Instant Hot/Cold Water Dispensers
  • Swimming Pool or Spa Equipment


Service Calls pricing can run from $75 to $150 for a plan I found online.  This functions like a deductible on a home insurance policy.  When the repair tech comes out to the home you are charged for a service call.  They diagnose and repair the problem, subject to the terms of the policy.  Even if they find nothing wrong, the service fee is still owed.

Suddenly, that $4,203 expense becomes a $75 fee.

Of course, the monthly cost is something to consider.  There are usually different plan levels to pick when choosing a home warranty.  The plan I found online came in three levels and had a fourth option that was customizable.

You should ask the following when looking at different home warranty plans:

Are there coverage limits or exclusions?

Is there a limit to the number of service calls per year?

Is there, or what is, the waiting period?

In summary, your home insurance covers you for disasters; like a fire, a wind storm, tree strikes, and sometimes water damage.  It won’t cover wear and tear.

The home warranty can cover major systems, like electrical, HVAC, appliances, and things like spas and pools!

Clearly, the details of home insurance and home warranty can be daunting.  It’s another reason to have a licensed agent find the right coverage for your situation.

Each policy, company, and situation is different.  Please read your policies for details.  This article is to be for reference only.

Give me a call today at 971.303.8508 and we can help make sure you get your questions answered.