Home warranty vs home insurance
They are not interchangeable and confusing them is expensive. One responds to an event, the other to age.
Insurance covers events
Wind, hail, fire, falling trees, sudden water discharge. The cause is sudden and accidental, a deductible applies, and the policy responds regardless of how old the house is.
A warranty covers wear
Age and breakdown with no event required. A service fee applies and pre-existing faults are excluded. Nothing sudden has to happen for a claim to be valid, and nothing sudden makes one valid either.
Where they overlap, badly
A water heater that bursts is both. Insurance may cover the water damage and not the unit. A warranty may cover the unit and not the damage. Neither covers the whole event, which is the trap.
What each actually costs
Insurance premium scales with the house and the deductible. A warranty is a flat annual fee plus per-claim fees. Insurers can non-renew after claims; warranty providers can decline renewal too.
Frequently asked questions
Does insurance cover an old water heater that burst?
Often the resulting water damage, usually not the unit itself beyond a small limit.
Is a warranty required with a mortgage?
No. Insurance is required. A warranty is optional.
Can I have both?
Yes, and for an older home it is a reasonable pairing. Just know which one responds to what.
Does a warranty cover code upgrades?
Usually not. Bringing old work up to current code is commonly excluded.