Falling Temperatures, Rising Knowledge: Help your clients understand the difference between a home warranty and home insurance

Falling Temperatures, Rising Knowledge: Help your clients understand the difference between a home warranty and home insurance

Key takeaways

  • Homeowners and buyers often misunderstand the difference between a home warranty and home insurance.
  • Real estate agents can provide value to their clients by explaining how a home warranty and home insurance work.
  • Agents can help clients recognize the value of having both a home warranty and home insurance.
  • Fall is an excellent time for agents to reach out to clients about the importance of protecting their homes and their systems.

As the temperature falls and autumn sweeps in, it's time to go back to school — and a great time to reach out to your clients for a bit of education about home warranties and the value they bring.

Your clients may question the difference between home warranties and home insurance. Even if your clients haven’t asked you about how a home warranty can offer protection when home insurance doesn’t, fall is a great time for you to reach out to your sphere and share information that can increase your clients’ knowledge.

When you reach for a cozy sweater and a pumpkin latte, your clients are probably turning on their heat for the first time in months and cranking up the water heater for an extra-long bath. Outside, an intense autumn storm may stir up leaves and break branches, which could impact their home.

As a real estate agent, you’re the perfect person to provide trusted advice to your clients when they don’t realize what could go wrong in their home and if it is covered.

A simple explanation can be that if their furnace or water heater flutters to a stop, a Cinch home warranty can kick in to help cover repair or replacement costs. More importantly, they can rely on Cinch to handle the issue by providing a licensed, vetted service provider from their extensive network.

On the other hand, if a branch breaks a window or knocks some shingles off the roof, a home insurance policy can reimburse your clients for repairs.

Understanding home insurance

If your buyers finance their home with a mortgage, the lender will require them to have home insurance to protect the property. Even if your buyers pay cash, home insurance is highly recommended to cover major repairs or even to replace the house if a natural disaster occurs.

Home insurance can offer several different layers of protection for homeowners, including reimbursement for damage or destruction due to a natural disaster or a peril such as a fire or a tornado. In addition, home insurance policies provide liability protection if someone is hurt while on an owner’s property, reimbursement for damaged or stolen items, and living expenses if the home is unlivable during repairs.

Home insurance is meant to cover damage from an accident, theft or nature: not to repair or replace items because they're broken or failing due to everyday use. For example, home insurance would pay for their replacement if kitchen appliances are damaged in a fire. However, a home insurance policy would not pay for its repair or replacement if an oven stops working just before the fall school bake sale.

Understanding home warranties

While a home insurance policy provides peace of mind about the ability to repair or replace a home or belongings after a catastrophic event, a home warranty offers similar peace of mind for what are also often expensive issues. Essentially, a home warranty is a service contract to help cover the repair or replacement of home appliances and home system components that break down over time.

Most homeowners would not consider living without a home insurance policy because of concern that a fire or a crime could wipe out their home equity or at least cause a major dent in their financial security.

Similarly, a home warranty is a wise investment to protect homeowners' long-term peace of mind. Instead of wondering how they'll pay for a repair or to replace an older appliance, having a home warranty increases their confidence that they can handle any issues with their systems or machines. A home warranty is a valuable safeguard for homeowners to prepare for unexpected repairs.

Unlike home insurance providers, which expect homeowners to find their own contractors, a home warranty includes access to a network of vetted, licensed service providers with the expertise to handle home appliances and systems.

Home warranty vs. home insurance

Here's a quick chart to make it easy to see the differences between these two essential homeowner protections:

Home Warranty

Home Insurance

Covers home repairs and replacements

Covers structural damage, personal possessions, liability and living expenses

Covers normal wear and tear from everyday use

Covers specific natural disasters and named perils

Provides homeowners access to a network of vetted service providers

Homeowners find and contract with service providers themselves

Homeowners pay a deductible

Homeowners pay a deductible

Optional policy

Mandatory by lenders


As the temperatures fall and clients prepare to cozy up in their new homes, the knowledge and understanding of home warranties and home insurance also should rise.

Help your clients "turn a new leaf" by recommending a home warranty to buyers and sellers, giving them peace of mind throughout every season. Learn more about Cinch home warranty coverage at cinchrealestate.com.