Home Warranty vs. Homeowners Insurance

A home warranty is an annual, renewable service contract that can provide coverage for home systems and appliances. It complements homeowners insurance by protecting things your insurance doesn't. When a covered home system or appliance breaks down due to normal wear and tear, your home warranty plan helps cover the cost to fix the item subject to the terms of the home warranty agreement. AHS will send a qualified, independent Pro to diagnose the issue. If we can't repair the covered item, we'll replace it. 

American Home Shield members also have access to member benefits including special pricing on home maintenance services, new appliances, HVAC systems and more - from tech and smart home installation services to pre-season HVAC tune-ups. 

See the plan agreement for coverage details, including service fees, limitations and exclusions. Coverage limits and charges for non-covered items may apply. Separate services may be offered to members by affiliates or third parties for additional fees and/or terms.

No. A home warranty and homeowners insurance serve different purposes. Homeowners insurance helps cover damage from perilous events like fires, storms, or theft, while a home warranty helps fix home systems and appliances when they break down from normal wear and tear. Many homeowners choose both for more complete protection.

Generally, a home warranty plan offers coverage for the parts and components of your kitchen appliances, washer and dryer, and major home systems such as your heating and AC, electrical and plumbing systems. Coverage also includes repairing or replacing covered items, subject to the limitations and exclusions in your plan agreement. 

Homeowners' insurance coverage typically includes any accidental damage to your home and belongings due to theft, storms, fires, and some natural disasters. There are four primary areas covered under a homeowners insurance policy:  

• The interior of your home 
• The exterior of your home 
• Personal property in case of theft, loss, or damage 
• General liability that can arise when a person is injured while on your property

A home warranty is a smart way to plan for unexpected and expensive home system and appliance repairs. When a covered item breaks down due to normal wear and tear, we'll fix it. And if we can't repair the covered item we'll replace it. Plus, you have the added convenience of only one company to contact when the breakdown occurs (no more searching for the right home repair professional). We’ll assign a qualified, independent Pro from our network to your service request who will get the job done right. With American Home Shield, you don’t have to face home repairs alone. You can leave the stress to us.

The monthly cost for a home warranty is based on your location, the size of your home, and which plan you choose. However, our ShieldSilver plan, which covers your home systems, starts as low as a $1/day.
A home insurance policy is usually mandatory, and a bank will generally require you to obtain one before issuing a mortgage on a home. In terms of typical homeowners insurance cost, the policy is renewed yearly, and its average annual cost is roughly $1,312; though, this cost varies widely from state to state.

Say you purchase homeowners insurance, and a pipe breaks and floods your kitchen. An insurance adjuster will come to your home and fill out a claim to repair or replace any damaged items in your home. Once the claim is approved, the insurance company will deduct the amount of your deductible and issue you a payment for the rest of the balance to repair your home. This deductible can also assist in lowering your yearly policy premium. The higher your deductible, the lower your yearly house insurance policy will cost. The National Association of Insurance Commissioners is a terrific resource for more information on home insurance, such as buying homeowners insurance and understanding what is not covered by homeowners insurance. 
Homeowners insurance generally provides liability protection. This means that in case of third parties being affected by elements of your property (for example, a branch of one of your trees damaging a neighbor's house) your personal liability is limited and the homeowners' insurance policies can protect you.

For American Home Shield members, a home warranty includes coverage of major components of up to 27 important appliances and home systems. Members also have access to benefits like home maintenance services such as seasonal HVAC tune-ups, and optional add ons to customize coverage.