Home Warranty

Not to be mistaken with its close relative homeowners insurance, a home warranty protects you from costly repairs or replacing key appliances in your home. To illustrate the point, cast your mind back to the number of times your air conditioner broke down last summer.

What is a home warranty?

A home warranty policy (also known as home appliance insurance) offers an additional layer of protection from the cost of potential home repairs and appliance breakdowns. If you’re already a homeowner, you might be well aware of the mounting costs of home system breakdowns and wear and tear of everyday appliances. So what kind of things can a home warranty cover you for? Well, depending on your policy, a home warranty can cover you for:

  • Garbage disposals
  • Plumbing
  • Electrical wiring
  • Major appliances like refrigerators, washers and dryers.

Before signing on the dotted line, make sure you’ve read through all the different home warranty options and decided on the level of service right for you (no point covering the jacuzzi if you don’t own one).

Btw – If you want to cover your home appliances with your homeowners insurance purchase Equipment Breakdown Coverage (EBC). Also known as Appliance Coverage, this is an endorsement to complement and enhance your homeowners or renters insurance. While those policies would already protect your electronics and appliances against certain “perils,” EBC would cover them for many other types of damage.

If you’re adding EBC to your renters policy with Lemonade you can expect to pay around $2/month extra on your policy (approx $24/year); with homeowners or condo insurance you’ll pay around $3/month ($36/year).

EBC is currently available in 16 states and we’re working hard to make it available in more, so stay tuned.

Home warranty vs Homeowners Insurance

These two easily confused terms are similar in that they both cover unexpected damage in your home. Homeowners insurance covers you for unexpected incidents, for example, if a guest is injured in your home, or if there’s a fire on your property. But Homeowners insurance also covers you from serious incidents that happen to you outside of your property, like if you accidentally crash your bicycle, or if your phone gets stolen.

To offer a practical example: if your dishwasher pipe bursts your homeowners insurance will typically* cover the water damage while your home warranty will probably replace the actual dishwasher. A good way to distinguish the two is to think about it this way: homeowners insurance covers you from the serious stuff and home warranty covers the appliances themselves.

*read your actual homeowners policy to determine what is covered and how.

Is homeowners insurance required?

Yes. Homeowners insurance will usually be required when you buy a home. Often your mortgagee/lender will ask for to approve your insurance policy before finalizing the home-buying process. 

Please Note: These definitions don’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade. They are intended for educational purposes only - they’re not meant to be used in lieu of professional legal or financial advice. We’ll do our best to keep them updated, but they may not always reflect current industry developments. Feel free to use the terms with attribution (friends don’t let friends plagiarize!)

Property and casualty insurance provided by Lemonade Insurance Company, 5 Crosby St., 3rd floor, New York, NY 10013. Life Insurance provided by North American Company for Life and Health Insurance®, Administrative Office, One Sammons Plaza, Sioux Falls, SD 57193.

Lemonade Insurance Agency, LLC (LIA) is acting as the agent of Lemonade Insurance Company and Lemonade Life Insurance Agency, LLC (LLIA) is acting as the agent of North American Company for Life and Health Insurance®. Both LIA and LLIA receive compensation based on the premiums for the insurance policies each sells. Further information is available upon request.

LLIA is a sub-producer of Bestow Agency, LLC. Life insurance quotes are provided by Bestow Agency, LLC dba Bestow Insurance Services in CA, who is the licensed agent. Term Life insurance policies are issued on North American Company for Life and Health Insurance® policy form LS181 and LS182, or state version including all applicable endorsements and riders. Products or issue ages may not be available in all jurisdictions. Limitations or restrictions may apply. Not available in New York. Our application asks about your lifestyle and health; your answers allow us to save you time and avoid offline medical exams.