A home warranty is a home service plan that is renewable and protects your home systems and most appliances, like your HVAC and hot water heater.
Home insurance policies typically cover major catastrophes while home warranties cover more of the day to day things that go bad.
Home warranties are common when someone buys a home. They are appealing because the new owner doesn't always know what maintenance has been done or what damage may have occurred. Typically, when a homeowner makes a claim, a service person comes out and (assuming the issue is covered) makes the repair or replaces the broken item. There will usually be a service fee that needs to be paid but that cost is usually worth it.
Some items your home warranty won't cover include: Fire, smoke, theft, fallen trees or damage caused by weather. Those items fall under your home insurance policy. If you have a tight budget, bought an older home or elected not to get a home inspection at all, you might benefit.
You may not get coverage if the issue is caused by neglect; either yours or the previous owners.
One way to differentiate between a home warranty and home insurance is simply that home insurance covers things that might happen and a home warranty covers things that will happen.
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