Last updated: October 7, 2026
Quick Answer
Home insurance generally pays for sudden, accidental damage from covered causes such as fire, wind, hail, theft and a burst pipe. A home warranty is a service contract that generally pays to repair or replace systems and appliances that wear out and break down. Flood, earthquake and sewer backup usually need separate coverage. Use the tool below to see the usual route for your situation.
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✓ Free✓ Nothing stored✓ Based on NAIC, FTC and a real warranty contractHome Warranty vs Home Insurance at a Glance
| Situation | Home insurance | Home warranty |
|---|---|---|
| Fire, lightning | ✓ Usually | ✗ Not a wear breakdown |
| Wind or hail damage | ✓ Usually | ✗ Usually not |
| Theft | ✓ Within policy limits | ✗ No |
| Sudden pipe burst | ✓ Usually the sudden damage | ~ Only a covered failed part |
| Old water heater or AC fails | ✗ Wear and tear is generally excluded | ✓ If your plan lists it |
| Fridge, oven or washer breaks | ✗ Usually not | ✓ If appliances are included |
| Flood | ✗ Separate flood policy needed | ✗ No |
| Sewer backup | ~ Only with an add-on | ~ Pump breakdown only, low limits |
Usual patterns only. Your own policy and contract decide, including limits, deductibles and exclusions.
The One Rule That Settles Most Cases
Sudden event, or slow wear? A sudden event from a covered cause (a storm, a fire, a break-in, a pipe that bursts) is usually an insurance matter. A part that simply gets old and stops working is usually what a home warranty is built for, if your plan lists it. Anything caused by neglect or long-term deterioration is often excluded by both, so keep service records and photos.
The FTC describes home warranties as service contracts, not insurance, and warns that they often have limits, exclusions and fees. That is why the contract matters more than the marketing. See our American Home Shield contract review for an example of the clauses to check.
Common Mistakes
- Treating a warranty as insurance. It will not pay for a fire, a storm or a theft.
- Assuming insurance pays for an old appliance. Wear and tear and maintenance problems are generally excluded.
- Forgetting flood and sewer backup. Both usually need their own coverage or an add-on.
- Skipping item limits. Warranties cap what they pay per item, so compare the cap with a real repair cost.
Not sure a warranty is worth it for your home? Try our break-even calculator, compare home warranty companies, or, if a claim was refused, build a denied-claim letter and read our step-by-step guide.
Frequently Asked Questions
Does a home warranty replace homeowners insurance?
No. The FTC calls home warranties service contracts, not insurance. They cover repair or replacement of listed systems and appliances, while insurance covers sudden damage from covered causes.
Does homeowners insurance cover appliance breakdowns?
Usually not. Wear and tear and maintenance problems are generally excluded. Damage from a covered cause, such as a fire started by an appliance, is treated differently.
Is flood damage covered by home insurance or a home warranty?
Neither in the usual case. Flood coverage is typically a separate policy, such as one through the National Flood Insurance Program.
Can I have both a home warranty and home insurance?
Yes. They cover different things, and some events involve both, for example a water heater that bursts and floods a room.
Sources
- NAIC: My Insurance Doesn’t Cover What?
- NAIC: Homeowners Insurance
- FTC: So what’s the deal with home warranties?
- American Home Shield sample plan agreements (limits cited as examples)
- Farmers: Does homeowners insurance cover water damage?
HomeWarrantyScope provides general information, not legal, insurance or financial advice. See our terms and editorial policy.