Home Insurance Vs. Home Warranties – What’s the Difference?

Written By Charlotte Insurance on September 15, 2016. It has 0 comments.

Your home is the biggest financial investment you may ever make. When something goes wrong, the last thing you want to do is consider the cost of repair and replacement. What do you need – an insurance policy or a home warranty?

Homeowner’s insurance and a home warranty both protect you home from unfortunate circumstances, but they both cover very different things.


Your Charlotte home insurance policy protects you and your home in four ways:

  • The interior of your home
  • The exterior of your home
  • Your personal property
  • You from personal liability if someone is hurt in your home

Accidents such as theft, storms, fires, and some natural disasters will be covered by your insurance. Protection from flooding and hurricanes requires additional coverage but once purchased covers you in the same way.

Insurance policies are mandatory if you have a mortgage on your home and highly recommended even if you don’t. Even without a mortgage, you may still be required to have a policy if you’re part of a homeowner’s or condo association. You’ll pay a yearly premium, often in monthly installments through escrow. When you file a claim, you’ll be responsible for the deductible and the insurance company will cover the remaining amount up to your policy limits.


In North Carolina, a home warranty is a service contract to repair or replace specific things in your home when they fail from age or standard wear and tear. Neglect or misuse is typically not covered. There are several parts of your home that can be covered by a home warranty:

  • HVAC
  • Electrical
  • Plumbing
  • Water heater
  • Kitchen appliances
  • Washer and dryer
  • Garage door opener

You’ll need to check with the home warranty company to determine exactly what is and isn’t covered by your contract. A home warranty is not mandatory and is renewed annually. When something breaks or stops working, you call the home warranty company who will send a service technician to your home. You’ll pay the service fee for the visit, up to an amount specified by your contract, and if the problem is covered by your warranty, the warranty company will pay the rest.

A home warranty can be nice to have, and if you sell your home, it’s a good incentive for buyers. However, it’s very limited in its scope, and won’t help you rebuild or pay for living expenses if your home is uninhabitable like a homeowner’s insurance policy does.

If you’ve got questions about your current policy or you’d like a quote for a new policy, contact us at Charlotte Insurance. We can help you protect your home without breaking the bank.

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