Home Warranty and Homeowners Insurance: Know the Difference

Why You Should Have Both a Home Warranty and Homeowners Insurance

A common mistake homeowners make is believing that their homeowners insurance is all inclusive. They think it will cover everything and anything that goes wrong in the home.

But it isn’t and it won’t.

For the most comprehensive home protection, homeowners often combine their homeowners insurance with a Home Warranty Service Agreement. Let’s look fat what a Home Warranty Service Agreement (home warranty) covers compared to what homeowners insurance covers. We’ll then look at why having both is the best way to protect your home.

What does a home warranty cover?

Home Warranty Service Agreement

A home warranty  from 2-10 Home Buyers Warranty (2-10 HBW) is an annual service contract. It can protect your budget against the unexpected costs of routine breakdowns to many of your home’s most crucial systems and appliances. Addressing breakdowns for these items can be costly, especially when you don’t expect them. That’s where a 2-10 HBW Home Warranty can come in handy.

Here are some of the most commonly covered systems and appliances under a 2-10 HBW Home Warranty.

  • HVAC systems (furnace and air conditioner)
  • Electrical and plumbing systems, including water heater
  • Major appliances: refrigerator, dishwasher, oven/range, washer and dryer

So, say you have a 2-10 HBW Home Warranty and your refrigerator breaks down. Instead of searching for a trustworthy technician and paying entirely out of pocket, you’d file a Service request. We’d assign a Service Contractor to your request, and they’d make an appointment with you. You’d pay them a small Service Fee, they’d diagnose the problem and report back to us, and we’d authorize a repair or replacement if your breakdown falls under your coverage.

If the problem falls under your coverage, 2-10 HBW can vastly reduce the cost to repair the problem or replace the system or appliance with something similar, per the terms of the Service Agreement.

What does homeowners insurance cover?

Homeowners Insurance

In short, homeowners insurance does the following.

  • Covers damage from severe weather, fire, or theft
  • Provides liability coverage against an accidental injury or death on your property
  • Helps pay to repair your home or replace personal property caused by outside events
  • Requires a deductible on each claim

Homeowners insurance does NOT cover the following:

  • Failures to systems (e.g., HVAC) and appliances (e.g., refrigerator) caused by routine use

It’s important to note that homeowners who take out a mortgage typically must have homeowners insurance. While it isn’t a law, mortgage lenders require borrowers to obtain homeowners insurance as a prerequisite to receiving a loan to purchase a house.

Homeowners insurance protects your home against risks like damage from severe weather (e.g., hail, tornadoes), theft, and liabilities from accidents that occur on your property (accidental injury or death). Some policies cover personal belongings as well. Every time you make a homeowners insurance claim, you pay a deductible, which often ranges from $500 to $1,000, for each claim.

Why have both?


While most homeowners insurance policies sound comprehensive, they have coverage limitations. A 2-10 HBW Home Warranty can complement homeowners insurance, which can go a long way toward protecting your budget.

For instance, if your HVAC system breaks down due to normal wear and tear, homeowners insurance will not repair or replace the unit. Without a home warranty, you’ll have to repair or replace it yourself entirely out of pocket. HVAC systems can cost thousands to repair or replace. With a home warranty, you could reduce those costs drastically.

It’s important to remember that 7 in 10 homes experience a major system or appliance breakdown in any given year. Also, 1 in 5 brand-new appliances break down within the first 4 years of ownership (often outside the manufacturer’s warranty). Without a home warranty, the burden is entirely on you to repair or replace it.

On the other hand, say a tornado hit your house and damaged your refrigerator. A home warranty would not cover your loss on the refrigerator. The damage did not occur as the result of routine use. You would need to file a claim with your homeowners insurance company.

Get quality coverage from 2-10 HBW

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Now that you know the differences in coverage, you can make the right decision for your home.

A Home Warranty Service Agreement from 2-10 HBW can help reduce the costs of unexpected breakdowns.

Home ownership can be expensive. Home Warranty Service Agreements can reduce unexpected expenses. Covering yourself with both homeowners insurance and a home warranty is one of the most prudent financial decisions you can make.

2-10 HBW offers quality Home Warranty Service Agreement coverage for homeowners. Let us help you protect your home and budget.

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Already a customer? You can renew your Home Warranty Service Agreement coverage today!

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Do you have a 2-10 HBW structural warranty? You can purchase Home Warranty Service Agreement coverage today!

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