A home warranty is not home insurance

When buying a home, you might be asked if you want a home warranty or residential service contract. A home warranty is different than home insurance.

• Insurance pays for damages from events your policy covers like fire or theft but not wear and tear.
• Warranties cover certain items in your home when they break down from normal wear and tear. Depending on your warranty, you may get coverage for appliances, such as stoves and refrigerators, water heaters, electrical and plumbing systems, and even swimming pools.

Home warranties can bring peace of mind about the equipment and systems that keep your home comfortable but carefully read the fine print before signing up. Not all home warranties are the same.

Under Texas law, companies that sell home warranties must be licensed by the Texas Department of Licensing and Regulation (TDLR).

Learn more

• List of TDLR-licensed residential service companies
• Residential service contract (video)
• Five things your home policy won’t cover