Kitchen interior and appliances with home warranty or home insurance.

Home Warranty vs Home Insurance

Updated March 6, 2019 . AmFam Team

Is a home warranty the same as homeowners insurance? Though both offer protection for your home during unexpected circumstances, a home warranty and home insurance are not the same, as they protect you in different ways. Take a look to find out more.

As a homeowner, you’re responsible for covering the costs of repairing and replacing everything from the roof to the refrigerator. The good news is, thanks to homeowners insurance add-ons like equipment breakdown coverage, it’s easy to protect the things you work so hard for.

But before you can be confident in your protection, you first need to understand the difference between a home warranty and equipment breakdown coverage. Let’s take a look at what each covers so you know how to select the right coverage for your home.

What Does Equipment Breakdown Coverage Cover?

Want to ensure your appliances and equipment are protected? Equipment breakdown coverage is an add-on coverage that broadens the protection provided by your standard home insurance policy. Having this coverage can protect you from paying the expensive repair or replacement costs for sudden and accidental breakdowns of appliances like refrigerators, ovens and stoves, home systems or smart home devices that are damaged due to mechanical or electrical breakdown.

You rely on equipment like appliances, heating and cooling units, and electrical systems to keep your home running smoothly. And if something breaks down, your standard home insurance policy won’t cover the cost to replace it — leaving you to pay out of pocket. Consider this: 60 percent of equipment breakdown claims are due to damages caused by power surges, and 75 percent of air conditioning system breakdowns are caused by electrical issues such as short circuit, arcing or surge. Having equipment breakdown coverage not only financially protects you from unexpected expenses like these, but provides peace of mind as well.

What Does a Home Warranty Cover?

A home warranty is a service contract that helps cover the repair or replacement of system components and appliances in your home due to issues like age and wear and tear. Things like HVAC systems, plumbing and electrical appliances may be covered for servicing, replacement or malfunction.

It’s important to know that each home warranty will differ. Many home warranty coverages have limitations on the items that can be claimed, and the extent of the repairs that will be made. So it’s important you understand exactly what yours does and doesn’t cover.

Why Choose Equipment Breakdown Coverage Over a Home Warranty?

Home warranties are often expensive and have more limitations on what they’ll protect against. But equipment breakdown coverage is affordable, straightforward and isn’t limited to specific kinds of equipment. If multiple appliances or systems break down, you’ve got one point of contact to help get your home back on track.

Find the Right Coverage for Your Home & Appliances

Home insurance protects you in more ways than you may think! Connect with an American Family Insurance agent (Opens in a new tab)to learn more about how equipment breakdown coverage can provide you with peace of mind.

Tools & Resources

Explore our tools and smart tips.