Home warranty vs. home insurance: what each covers — and a third option
Homeowners insurance pays for sudden damage, like a fire or a storm, and is usually required by your mortgage lender. A home warranty is a service contract for systems and appliances that break down from wear and tear, and it usually charges a fee every time a technician comes out.
What homeowners insurance covers
Homeowners insurance protects the structure of your home, your belongings, and you, against sudden and accidental losses. Typical covered events include fire, lightning, windstorms and hail, theft, and some kinds of sudden water damage. Most policies also include personal liability coverage if someone is injured on your property.
You pay a premium, and when you file a claim you usually pay a deductible first. If you have a mortgage, your lender will almost always require you to carry it.
What insurance generally does not cover is the slow stuff: wear and tear, gradual deterioration, lack of maintenance, and mechanical breakdown. When a furnace dies of old age or a dishwasher motor burns out, that is usually not an insurance claim — the kind of breakdown covered on our HVAC and appliance coverage pages. Floods and earthquakes often need separate policies too. Your own policy is the final word, so read it.
What a home warranty covers
A home warranty is a service contract, not an insurance policy. It pays to repair or replace covered home systems and appliances — think HVAC, plumbing, electrical, water heaters, and kitchen and laundry appliances — when they fail from normal use.
You pay for the contract, and then you pay a service call fee every time a technician comes out, typically $100–125 per visit. Most contracts set caps per item and per year, list exclusions, and assign the contractor from the warranty company's network. Lenders do not require a home warranty; it is often offered when a home is bought or sold.
If you are shopping for one, here is how to compare home warranty plans and an honest answer to whether a home warranty is worth it.
Who pays when something goes wrong?
The clearest way to see the difference is to walk through the breakdowns and accidents homeowners actually run into. These are general patterns — your own policy or contract decides.
| Question | Homeowners insurance | Typical home warranty | MyHappyHome™ membership |
|---|---|---|---|
| A storm damages your roof | Typically covered, after your deductible | Not covered | Not covered |
| A kitchen fire | Typically covered, after your deductible | Not covered | Not covered |
| Your aging AC stops cooling | Usually not covered (wear and tear) | Often covered, after a $100–125 service fee, within caps and exclusions | Covered repair up to $3,000, $0 per visit, subject to eligibility |
| The water heater quits | Usually not covered (mechanical failure) | Often covered, after a service fee, within caps | Covered repair up to your plan's coverage limit, $0 per visit, subject to eligibility |
| The refrigerator stops cooling | Usually not covered | Often covered, after a service fee, within caps | Covered repair up to your plan's coverage limit, $0 per visit, subject to eligibility |
| It was already broken when you signed up | Depends on the cause and policy | Generally not covered | Not covered |
| Required by a mortgage lender | Almost always | No | No |
The third option: a capped repair membership
MyHappyHome™ is neither of the two. It is a membership that covers future repairs to your HVAC, internal plumbing, internal electrical, and listed major appliances — the everyday breakdowns insurance usually leaves out.
Where it differs from a typical home warranty:
- No per-visit fee. Members pay $0 per visit, instead of the $100–125 service call fee a typical warranty charges.
- Limits stated up front. $3,000 for HVAC, paid direct to the installer; your plan's coverage limit for other covered systems and appliances. Costs above the limit are yours.
- No underwriting. No inspection or questionnaire to join.
- Independent local pros. We coordinate qualified partner contractors; we do not send our own trucks.
And where it is the same as any honest plan:
- There is a 30-day wait before your first claim.
- Anything already broken when you join is not covered.
- Every claim is subject to eligibility under your plan terms.
It does not replace homeowners insurance. Keep your policy for fire, storms, and theft, and treat a membership as a way to budget for the breakdowns. See exactly what is included in our home protection plan or compare plans and prices.
What is covered — and what is not.
Repairs for HVAC, plumbing, electrical, and appliances, up to stated limits, paid direct to the independent pro who does the work. No surprises in the fine print.
Covered
- HVAC. Covered repairs to central heating and cooling, up to $3,000, paid direct to the installer.
- Plumbing. Covered repairs to your home's internal plumbing system, up to your plan's coverage limit, paid direct to the installer.
- Electrical. Covered repairs to your home's internal electrical system, up to your plan's coverage limit, paid direct to the installer.
- Appliances. Covered repairs to listed major appliances, up to your plan's coverage limit, paid direct to the installer.
Not covered
- Anything already broken when you join. A new plan never covers a breakdown that already happened.
- Pre-existing problems, known or unknown, before your coverage starts.
- Claims during the first 30 days — the waiting period before your first claim.
- Costs above your plan's stated limit.
- Items or systems not listed in your plan. Every claim is subject to eligibility under your plan terms.
Read the full membership terms or compare plans.
Broken today, or protecting what comes next?
Path 1
Something Broke? Get It Fixed Now
If your AC, water heater, electrical panel, or fridge has already failed, start here. Because the breakdown already happened, a new membership does not cover it — you pay for that repair directly.
Something Broke? Get It Fixed NowPath 2
Protect my home from the next one
Join a membership, wait 30 days, and from then on a covered breakdown costs $0 per visit, with covered repair costs paid direct to the installer up to your plan's stated limit.
Compare PlansHome warranty vs. insurance: common questions
What is the main difference between a home warranty and home insurance?
Homeowners insurance pays for sudden, accidental damage to your home and belongings from covered events such as fire, windstorms, or theft, and it includes liability protection. A home warranty is a service contract that pays to repair covered systems and appliances when they break down from normal wear and tear.
Do I need both a home warranty and homeowners insurance?
Homeowners insurance is the one not to skip: if you have a mortgage, your lender will almost always require it, and it protects you from losses you could not easily absorb. A home warranty, or a repair membership like ours, is optional. It is a way to budget for breakdowns, not a substitute for insurance.
Does homeowners insurance cover a broken AC or water heater?
Usually not when the cause is age, wear and tear, or mechanical failure. Insurance is built for sudden damage from covered events. Check your own policy, because coverage varies by insurer and by policy.
Is MyHappyHome™ a home warranty or insurance?
Neither. MyHappyHome™ is a capped membership that covers future repairs to HVAC, plumbing, electrical, and listed appliances. Members pay $0 per visit, limits are stated up front, and claims start after a 30-day wait.
Will a home warranty or membership cover something already broken?
Generally no. Home warranties typically exclude pre-existing problems, and MyHappyHome™ never covers a breakdown that already happened before your coverage started. If something is broken right now, you pay for that repair directly.
More answers on the FAQ page, or read the full membership terms.
Ask us what a membership would and would not cover.
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Keep comparing before you decide
Insurance for disasters. A membership for breakdowns.
Covered repairs for HVAC, plumbing, electrical, and appliances at $0 per visit, with limits stated up front.