There’s no place like home. But what happens if Dorothy had clicked her heels and returned to discover the tornado had wiped her home off the face of the Earth? Or, worse, her refrigerator had broken down and the house smelled of rotting food?

Dang, she might think, I wish I’d taken out a home warranty or home insurance, it’s going to take more than a brain, a heart and courage to pay for this mess. But which would Dorothy need? A home warranty or home insurance? Which is better?

This article aims to answer that burning question. We’ll also compare home warranties and home insurance side by side, explain what situation each is best for, and help you decide whether you need both or not.

You can find out the best home warranty for you and your property by completing this short quiz in association with GoWizard. Just answer a few quick questions and they’ll tell you exactly which provider is right for you.

couple looking worried at papers

What’s the difference between home warranty and home insurance?

A home warranty is a service contract that covers repair and replacement of key systems and appliances, meanwhile home insurance covers your home against disasters and perils.


A home warranty will only cover repair and replacements that are needed as a result of age or normal wear and tear. And while it will cover your critical systems (plumbing, HVAC, electricity) and key appliances like your refrigerator, oven, and washers, it won’t cover structural elements like windows and it won’t cover the damage caused by faulty systems or appliances. However, you can get additional coverage for things like pools, spas, and septic systems.

In contrast, home insurance provides coverage if the actual structure of your home, including garages and outbuildings, is damaged or even completely destroyed by an unforeseen disaster. This could be anything from a fire or a flood to theft or a thunderstorm. Home insurance can also cover personal belongings against damage or theft, provide liability against lawsuits, and pay for additional expenses such as a hotel stay if your home is uninhabitable.

Find out more: What is a home warranty and how does it work?


A home warranty premium will cost between $300 and $1,000 a year depending on the type of property you own, your location, and the extent of the coverage you take out. You’ll also have to pay a service fee of between $75 and $125 every time you make a claim.

In contrast, the average home insurance premium is a little bit higher than a home warranty, at around $1,250 a year, according to the 2021 National Association of Insurance Commissioners (NAC) report. The factors that affect the cost of your plan include your location, the value of your belongings, the size and condition of your home, the coverage limits you choose, and your claims history. In the event that you make a claim, you’ll also pay a deductible of between $100 and $2,000 depending on the cost of your premium.

Find out more: How much does a home warranty cost?

Legal requirements

A home warranty is completely optional, and whether or not you have one shouldn’t impact your chances of being able to take out a mortgage.

However, mortgage providers do often require a minimum level of home insurance cover as a condition of lending. This is because there’s a big risk that they won’t be repaid if the home is damaged or destroyed.

water leaking onto the floor of a home

Should you get a home warranty or home insurance?

Home warranty insurance and home insurance are very different but equally useful beasts. But which should you get and in what circumstances is each the best?

When is a home warranty best?

A home warranty is the best option if you want to cover your home’s critical systems and appliances against age-related issues and general wear and tear. If you do encounter a problem, you can access repair and replacement for the cost of the service fee (usually between $75 and $100), rather than the many thousands it could otherwise cost (though you’ll still have to pay any excess over the coverage limit).

When is home insurance best?

Home insurance is best if you need to protect the very structure of your home and its contents against the kinds of damage and destruction caused by natural disasters, vandalism, and theft. While a home warranty is intended to repair the damage caused by a bit of rust, home insurance has you covered if your home is completely destroyed by a hurricane.

Should you get both?

Yes, the best way to protect your home and your finances from disaster is to take out both a home warranty and a home insurance policy. That way, you’ll be protected against everything, from a faulty faucet to a flash flood.

For example, while your home warranty will cover the cost of repairing a faulty pipe or washing machine, it won’t cover the water damage caused by that fault – that’s where home insurance comes in handy.

In contrast, with a home warranty, when your heating fails on a cold day, you’ll be able to get it repaired by a vetted contractor for a small fee – but if the contractor accidentally smashes the window with a ladder, you’ll need home insurance to cover it.

Our verdict

If you want to shield yourself and your home from the extortionate costs of everything from repairs to rehousing after damage or disaster, you need the double strength protection of a home warranty and a home insurance policy. It’s a watertight combination that will give you peace of mind and protect your property.

Why not get started today with your perfect home warranty policy? Just complete our quick quiz, created in association with GoWizard. All you need to do is answer a few simple questions to be matched with the best home warranty providers for you and your needs.