When something goes wrong with your home or its contents, repairs can quickly become costly. Avoid unnecessary expenses by understanding how your warranties and insurance coverage actually work.
Key Takeaways:
- Home insurance coverage protects the structure and its contents while providing liability protection and help with additional living expenses.
- Home warranties cover a home’s major appliances and systems under certain conditions but don’t protect the structure or its wider contents.
- Having both forms of coverage could be a sound financial decision, depending on the status of your manufacturer or retailer warranties.
Many homeowners in New York might be confused about what their home insurance covers. What’s more, some may mistakenly believe that a home warranty offers the same protection as home insurance.
When it comes to home insurance vs home warranty, an insurance provider might summarize the argument by calling home insurance a necessity and home warranties generally more of a choice.
Of course, there’s always more to unpack when it comes to coverage comparisons. Here, we’ll explain the key differences by detailing what’s actually protected in each scenario and why having the right policy matters to shield one of your biggest investments.
The Basics of Home Insurance
Home insurance coverage protects the property itself: the walls, floors, foundation, and any structures attached to the property, like a garage, though these are usually covered at a percentage of the main home’s coverage. It also covers personal property inside the home, which may include:
- Furniture.
- Clothing.
- Electronics.
- Jewelry.
- Decorative pieces.
All these things are covered against damage or destruction caused by certain natural occurrences like fire, hail, lightning, or hurricanes. Some insurers extend personal possession protections to items stored outside of the home.
Home insurance coverage can provide further protection by contributing to medical expenses if someone is injured while on your property. It can also financially contribute toward expenses caused to someone else’s property by the policyholder, their covered parties, or their pets.
Home insurance can even further help policyholders to meet additional living expenses if they’re required to stay elsewhere while their home is being repaired. These expenses may include accommodations, gas, and food.
Price Points and Key Considerations with New York Home Insurance
Home insurance can be purchased in one of eight types (HO-1 to HO-8). These range from very limited in scope to specialized coverage for condos, mobile homes, and older properties.
Home insurance policy costs in New York depend on multiple factors, including the building’s age, location, and the degree of coverage provided. The average annual price in the state is $1,843 for $300k in coverage.
These costs are almost continuously increasing, but New Yorkers can try to minimize their premium expenses by taking proactive steps, which include comparing quotes and bundling other policies with the same insurer.
It’s vital to know what home insurance doesn’t cover, which includes:
- Assets in a home-based business.
- Home repairs caused by lack of maintenance or wear and tear over time.
- Protection against some natural disasters (flood, snow, and earthquake).
- Acts of terrorism or war.
It’s also worth mentioning that home insurance is sometimes confused with mortgage insurance, another form of coverage that protects the lender but provides no coverage for the home or its contents.
Now, let’s continue clarifying the home insurance vs home warranty comparison.
How Home Warranties Work
A home warranty isn’t generally required by most mortgage companies. It protects your property’s major appliances and covered systems against general wear and tear over time, as opposed to the risks covered under home insurance coverage.
Major home appliances protected by home warranties are typically washing machines, dryers, ovens, and refrigerators. However, some warranties may extend it to include things like garbage disposals and garage door openers.
Home warranties can also help with the cost of repairs and replacements in a house’s plumbing, HVAC, and electrical systems. The homeowner is required to file a claim on the warranty should age or wear and tear lead to repair or replacement expenses.
The cost is then offset by the home warranty (minus any deductible) if the provider’s assigned professional feels the issue qualifies under the warranty’s terms.
Setting up a home warranty can be very flexible in terms of term limits. Some are renewable on a monthly basis, and others annually.
Key Considerations with Home Warranties
It’s important to note that a home warranty won’t automatically cover all home systems and appliances. Those with existing manufacturer or retailer warranties may be excluded. Nor will home warranties cover any items that were damaged or otherwise compromised before the home warranty was established.
Damage to home appliances and systems caused by improper use, unauthorized repairs, or lack of maintenance while under a home warranty are also unlikely to be covered. It’s, therefore, best practice to keep records of any maintenance made on systems and appliances while they’re protected under home warranty.
As with home insurance coverage, it’s always best to have a thorough understanding of home warranties before making any commitment. Home warranty prices depend on how much coverage is needed.
The average monthly cost of a home warranty in 2025 is around $53 a month. Those with more appliances, larger homes, and looking to cover add-ons like pools or septic systems should expect to pay more.
Home Insurance Vs Home Warranty: Is It Worth Having Both?
It’s ultimately down to the individual homeowner. Some may find the expense of both unmanageable or unnecessary, particularly if they feel the manufacturer or retail warranties attached to their home systems and appliances are coverage enough.
Others may see having both as an added peace of mind, especially if their systems and appliances have outlived consumer warranties. It’s also a fair argument that a home warranty could be a buffer against rising trade fees—hiring an out-of-warranty plumber in 2025 could cost up to $200 an hour.
One thing’s for sure: It’s never too early to get home insurance, which will always be an essential protection for people and property.
The NICRIS Insurance Agency offers an hour-long insurance review that’s completely free if you’re looking for coverage, and we’re here to answer your home insurance coverage questions via our contact form. Get in touch today!