What Is a Home Warranty? Coverage vs Insurance (2026)

Updated November 2026. Homeowners insurance pays when something sudden happens to your house. A home warranty pays when something simply wears out. This guide explains the second one, using Texas, Florida and California rules and a real plan’s terms, all read on November 1, 2026.

A home warranty is a yearly service contract that pays to repair or replace home systems and appliances, like the AC, water heater or oven, when they break from normal wear. Homeowners insurance doesn’t cover that. As of November 2026, Texas licenses warranty companies through TDLR, and Florida regulates them under Chapter 634 of its statutes.

So if you searched for homeowners insurance and landed here, you’re in the right neighborhood. Insurance and a warranty sit side by side, and each one covers what the other leaves out. For the short dictionary version, see our glossary entry on the home warranty definition. Selling soon? Beycome sellers can get free listing coverage through Armadillo, and you can list on the MLS from $99 in most states (see your state page).

Jump to: 🏠 What it is · 🤝 Warranty vs insurance · 🪜 What’s covered · 📍 State rules · 💲 Sellers · ❓ FAQ

What is a home warranty on your U.S. property?

Think of it as a repair plan for the parts of a house that wear out. You pay a yearly price. When a covered item breaks, you call the warranty company, it sends a contractor, and you pay a set service fee per visit. The company pays the rest of the repair, or replaces the item, up to the plan’s limits.

Florida’s statute puts it in legal terms. A home warranty is a contract where a company agrees to cover “the cost of repair” or to provide the repair or replacement “of any structural component or appliance of a home” (Florida Statutes 634.301). Texas calls the same thing a residential service contract. California calls it a home protection contract.

A warranty isn’t the builder’s warranty on a new home, and it isn’t a manufacturer’s warranty on a fridge. It’s a separate plan you buy, or that someone buys for you at closing.

Home warranty vs homeowners insurance: what’s the difference?

The Texas Department of Insurance put it simply in January 2026: home insurance pays for damage from covered events, and it doesn’t cover wear and tear. Warranties cover specific items when they fail from ordinary aging or use (TDI, “A home warranty is not home insurance”).

That last row is the trap. Some damage falls through both. The Texas Department of Insurance lists floods, earthquakes, wear and tear, pests, slow leaks and long vacancy among the things most home policies don’t cover, and says most insurers stop coverage once a house sits empty for 60 days or more (TDI home insurance guide). A warranty fills the wear-and-tear gap only.

The others need their own fix. FEMA says 99% of US counties have had a flood in the past 20 years, and most flood policies have a 30-day wait (FEMA FloodSmart). In California, home policies don’t cover earthquake damage except fire, and insurers must offer quake coverage every other year (California Department of Insurance). In Florida, every home insurer must cover a catastrophic ground cover collapse, while wider sinkhole coverage costs extra (Florida Statutes 627.706).

Picking the insurance side? See what to look for in home insurance, three things to know about property insurance and why home insurance matters.

What does a home warranty cover?

It depends on the plan, and that’s the honest answer. TDI’s list of what plans may include is a good start: appliances like stoves and refrigerators, water heaters, electrical and plumbing systems, and sometimes swimming pools. Many plans sell a basic tier and let you add items such as a pool, a well pump or a second fridge.

Limits matter as much as the list. Here’s a real example, the Beycome buyer plan on Armadillo’s partner page, read November 1, 2026: $519 a year, up to $7,500 of coverage in the first year after closing, $3,000 per category for air conditioning, heating, plumbing and electrical, $2,000 each for the dishwasher, oven and range, and a $100 service fee per claim (Armadillo, home cover with Beycome).

Read three parts of any contract before you pay. The exclusions, which often leave out problems that existed before the plan started and damage from poor maintenance. The per-item caps. And the waiting period before coverage begins. Our guide to home warranty costs, timing and denied claims goes deeper on each, and our review of Armadillo’s home warranty shows how one company’s plans compare.

What about a big project? A warranty won’t pay for a renovation, and your builder’s insurance doesn’t always protect the house you already have. Call your insurer before major work. If you invest in property, our tax and legal tips for real estate investors cover more ground.

Who regulates home warranties in your state?

There’s no single federal home warranty law, so check the state.

Texas. House Bill 1560 moved oversight of residential service companies from the Texas Real Estate Commission to the Texas Department of Licensing and Regulation on September 1, 2021 (TDLR). TDI says companies selling home warranties in Texas must be licensed by TDLR, which publishes a list of licensed companies.

Florida. Home warranty associations fall under Part II of Chapter 634, Florida Statutes, which covers licensing, required contract provisions and a specific rule for homes on the market (more on that below).

California. The Department of Insurance licenses home protection companies under Insurance Code sections 12740 to 12764, the Home Protection Law (California Department of Insurance).

Wherever you are, look the company up with the state before you sign. A license means there’s a regulator to call if a claim goes sideways.

Should a seller offer a home warranty?

It’s optional, and it’s a negotiating tool more than a must. A buyer may ask for one, or ask for a credit at closing to buy their own. Some sellers offer one up front so a tired furnace doesn’t become a price fight after the inspection. Our list of the most common repairs after a home inspection shows where those fights usually start.

There’s also coverage for while you’re selling. Florida law lets a home warranty cover a home during its listing period, for up to 12 months, with a separate fee of at least 15% of the annual price, due when the listing ends or at closing (Florida Statutes 634.331). Other states handle it their own way.

For Beycome sellers, Armadillo’s partner page offers listing coverage at no charge: up to $1,500 for HVAC, plumbing and electrical while the home is on the market, starting 7 days after sign-up. That way a water heater that quits during showings doesn’t stall the sale.

Moving out before closing? A warranty won’t help with the vacancy gap in your insurance. Call your insurer, and read our tips to protect a vacant home. Keep your policy active until the deed changes hands.

Is a home warranty worth it?

Sometimes. It makes the most sense when the big systems are older, when you’d rather pay a set amount than face a surprise repair bill, or when you’re buying and your savings went into the down payment. It makes less sense on a new home still under the builder’s warranty, or if you’d simply put the yearly price in a repair fund.

Do the math with real numbers. Add the yearly price to the service fees you’d pay on two or three calls, and compare it with what one AC repair costs where you live. Then read the caps again.

Selling with Beycome

A warranty is one line on the closing statement. For the rest, see who pays closing costs when you sell and real estate commission costs. Title insurance is a different product again: it protects ownership, not appliances or storms, as understanding title insurance explains. Beycome Title handles closings in Florida and Texas today and adds Michigan, Ohio, Illinois and Indiana starting November 2, 2026.

A Beycome listing puts your home on the major home search sites and the MLS from $99 in most states (see your state page), with $0 due to Beycome at closing, in 17 states and DC. See the flat fee MLS listing plans, or choose Concierge (see current price) for an expert who works with you all the way, while you keep every decision.

Home warranty questions