Know the Difference: Home Warranty vs. Home Insurance

A home warranty is a great perk when you buy a new-construction home (and sometimes even a resale!) but do you know how it differs from home insurance coverage? Knowing who to call about a home issue can put you on the fast track to getting it addressed ASAP!

What is a warranty?

In simplest terms, a warranty is a contractual assurance given by a seller to a buyer. It’s not quite the same thing as a guarantee, as it’s not unconditional. Warranties are designed to protect a buyer for a pre-determined amount of time in the event that there is an issue with the product or item they’ve purchased due to its manner of installation, construction or materials.

For new homebuyers, warranties can include everything from structural components to appliances. While your foundation or roof’s warranty likely falls under the purview of your homebuilder’s limited warranty, your washing machine, HVAC, dishwasher, and other appliance warranties will be the responsibility of the product’s manufacturer.

Richmond American offers limited warranties on certain building materials, home systems and workmanship, as well as longer-term warranties on major structural items. Buyers can ask their community’s sales associate for more information. An overview of warranty coverages and the process for submitting an online warranty work request to our dedicated Home Care team is also provided at Richmond American new home orientations, which take place shortly before move-in.

What is insurance?

A form of risk management, insurance offers protection from financial loss in the event of an unexpected incident such as an accident, fire or natural disaster. In exchange for a fee known as a premium, an insurance provider will offer financial restitution to the policy holder in the event of certain unfortunate events.

There are several different forms and levels of insurance and rates/coverage can vary significantly depending upon a variety of factors. In terms of your home insurance, the cost of building supplies in your area, your home’s distance to a fire station, the likelihood of a hurricane or tornado in your region, etc. are just some of the considerations that contribute to your insurance rate. Coverage for potential hazards unique to your area, such as flood insurance, is typically obtained in a separate, independent policy.

If you have any questions about home insurance, our affiliate American Home Insurance Agency (AHI) is available to help! On the AHI website, you can compare quotes to make sure you’re getting what you need at a competitive rate and also access a handy FAQ page.

So, what’s the difference between home insurance and home warranties?

In general, warranties will cover issues related to a home or product’s installation, structure or materials, while insurance is geared more toward unexpected incidents. Both insurance policies and warranties can help protect you from some repair costs, but remember they aren’t a replacement for responsible homeowner maintenance. Properly caring for your home and appliances as recommended by the builder or manufacturer can also help prolong the life of your investment.

Additional peace of mind…

As part of the Richmond American homebuying journey, our Home Care Specialists will check in with you at intervals between the time you move in and the end of your first year in your new home. During these chats, you’ll be able to ask questions about your warranties. A user-friendly online warranty request system is also available to Richmond American homebuyers.

Striving to make homebuyers happy has been a goal of Richmond American’s since Day 1. We strive to make the homebuying process as enjoyable as possible and offering our customers peace of mind is a big part of that!

You’ve found your dream home. Now it’s time to insure it!

This guide addresses common questions about insurance policies, coverage options, saving on premiums and what to expect from your licensed agent.

View guide

Man sitting and woman standing next to kitchen table with a laptop, calculator, and paperwork

Warranties are subject to terms, conditions and limitations. See a sales associate for details on the limited warranty provided in connection with the purchase of a Richmond American Homes home.