(Historically known as home warranty) we like to call it “home health insurance”
Homeowners insurance pays for damage and loss caused by outside forces like natural disasters, fires and weather, stolen items due to a burglary, or structural malfunctions of the house. For example, while homeowners insurance would cover a collapsed kitchen ceiling due to a termite takeover, it would not cover an oven range that’s ‘burnt out’ and stops working. That’s where home warranty comes in.
A home warranty covers the cost of repairs and replacements of certain appliances and systems in your home caused by everyday wear and tear, or from old age. Malfunctioning microwave? Fried refrigerator? Temperamental thermostat? Elderly HVAC?
In a nutshell, homeowners insurance covers unexpected events that lead to damage, while home warranties cover events that are somewhat expected, such as the aging and ultimate breakdown of appliances and systems.