Clients often ask me what the difference is between a home warranty and homeowners insurance, so I thought I would break this down.

Home Insurance

Homeowners insurance pays for any accidental damages and losses that are caused by fire, lightning strikes, windstorms, and hail.

However, damage from earthquakes and floods is typically not covered, though there is additional insurance you can purchase for that specific coverage.

It also covers the replacement of personal property in case of theft or damage and liability if a person were to get injured in your home or on your property.

According to American Home Shield, the average annual cost of a homeowners insurance policy ranges between $300 and $1,000, and the lender usually asks a homebuyer to obtain a policy before the mortgage is issued.

Make sure to keep in mind that each type of coverage in the policy is subject to a limit and, in most cases, homeowners have to pay a deductible.

Home Warranties

A home warranty is designed to cover the cost of repairs and replacements of larger appliances and crucial systems in a home that may fail or break due to age and wear and tear.

This includes but is not limited to: HVAC (heating, ventilation and air conditioning), electrical, or plumbing components, kitchen appliances, and washers or dryers.

With a home warranty, homeowners are required to pay premiums year-round, even if they do not use it, and it will not cover damages if appliances were not maintained properly or if the damage is from a fire or other disaster.

This real estate column is brought to you by Kylah Artz, a local real estate agent with Texas Urban Living, serving the DFW area.