Yes, you should have both a home warranty and home insurance. While home insurance is often a prerequisite for obtaining a mortgage, a home warranty is both optional and valuable as a way to protect your budget against unexpected, expensive, covered breakdowns to home systems and appliances.
Let's learn what homeowners insurance covers, what a home warranty covers, why you need both, and how a structural warranty fits if you're the owner of a newly built home.
What Does Homeowners Insurance Cover?
Your homeowners insurance policy is designed to protect against unexpected disasters.
We're talking about things like fire, major storm damage, theft, and personal liability if someone gets hurt on your property. In most cases, it also covers personal belongings and sometimes even living expenses if your home becomes uninhabitable during repairs.
However, it’s worth noting what it doesn’t usually cover:
- Damage from floods or earthquakes (you'll likely need separate policies for those)
- Breakdowns due to wear and tear (like your AC conking out after 12 years)
It’s also important to know that if you have a mortgage, homeowners insurance isn’t optional. It’s typically required by your lender.
What Is a Home Warranty?
It helps reduce the costs when a covered system or appliance experiences a covered breakdown. This often includes HVAC systems (heating and AC), plumbing systems, electrical systems, and major kitchen appliances like refrigerators, ovens, and dishwashers.
A home warranty can complement your home insurance by protecting your against something that's relatively common and often expensive: system and appliance breakdowns caused by normal wear and tear.
For example:
- Your fridge stops cooling
- Your water heater leaks
- Your air conditioner quits in July
If these breakdowns occurred from routine use, your homeowners insurance will not cover the costs to repair or replace it. However, a home warranty could cover repair or replacement costs for all three.
When you chose 2-10 Home Buyers Warranty (2-10) for a home warranty, we make it easy for you to request service when you suffer a covered breakdown.
- You request service online or by phone.
- We connect you with a quality, independent repair Pro, whom you pay a small service fee.
- They diagnose the issue and repair it. If they can't repair it, they replace it.
A Few Everyday Scenarios to Bring It to Life
Let’s take a look at how coverage might play out in the real world:
Scenario 1: Your dishwasher stops working after years of daily use.
- Home warranty covers the repair or replacement.
- Homeowners insurance does not.
Scenario 2: That same dishwasher has a covered breakdown that floods your kitchen.
- Warranty addresses the covered dishwasher breakdown but not any secondary damage.
- Insurance may address any floor damage, based on your policy.
Scenario 3: A tree limb crashes through your roof in a storm.
- Insurance covers the repair.
- Warranty won’t apply, since it’s not wear and tear.
Scenario 4: Your oven is destroyed in a kitchen fire.
- Insurance covers it.
- Warranty doesn’t apply in a fire situation.
These examples illustrate the difference between a home warranty and homeowners insurance: Insurance addresses unexpected events, while a home warranty addresses inevitable, covered breakdowns to covered systems and appliances.
Do You Really Need Both?
You should consider both because home insurance and a home warranty complement each other.
Home insurance helps protect you against major events that are outside of your control. A home warranty helps reduce the costs of covered breakdowns, which tend to occur more often than the kinds of events that home insurance covers.
When you have both, you set yourself up to protect your budget against expensive, covered issues, whether it's a routine breakdown or an outright catastrophe.
And What About Structural Warranties?
If you bought a brand-new home, there’s one more type of coverage to know about: the structural warranty.
This isn’t something you buy yourself – it’s a warranty your builder provides, often administered by a third-party company like 2-10. It protects against major structural defects in load-bearing elements of the home, such as:
- The foundation
- Framing and roof support
- Load-bearing walls or beams
If you’re building or buying new construction, it’s smart to ask whether your builder participates in a structural warranty program. It can give you long-term protection (up to 10 years) for issues that are expensive – and sometimes dangerous – if left unaddressed.
Comparing Coverage Types
Let’s wrap it up with a quick overview of the three main types of protection:
|
Type of Coverage |
What It Protects |
Who Needs It |
|
Homeowners Insurance |
Fire, theft, liability, storm damage |
Required if you have a mortgage |
|
Home Warranty |
Breakdowns of appliances/systems from normal use |
Optional but smart for most homeowners |
|
Structural Warranty |
Major defects in load-bearing components |
Applies to new-construction homes only |
Cover It All – The Smart Way
Buying a home is one of the biggest investments you’ll ever make. While homeowners insurance is a must-have, pairing it with a home warranty can save you from headaches (and repair bills) when your essential systems start to show their age.
Protect your investment with confidence — get a quote from 2-10 Home Buyers Warranty today.
And if you’re moving into a new build? Don’t forget to ask your builder about a structural warranty.
