A Complete Guide to Home Warranties: Coverage, Cost & More

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As a homeowner, you’re well aware of the risks that come with owning a home. Appliances break down, plumbing systems fail, and countless other issues can arise when you least expect them. While you can’t always predict these events, you can take steps to ensure that you’re financially prepared when they do happen. That’s why choosing a home warranty that meets your specific needs is crucial.

In this guide, we’ll explore the various home warranty options available to homeowners. Learning more about these annual plans will help you better understand their entailments. If you’re considering getting a home warranty, it’s crucial to do your research and know what to expect. Here’s everything you need to know about navigating home warranties. 

What is a Home Warranty?

A home warranty is defined as a service contract that covers essential appliances and systems in your home. These include HVAC systems, plumbing systems, electrical infrastructure and major home appliances. The purpose of a home warranty is to cover any wear and tear to your appliances and systems. If something in your home breaks down, the warranty will help pay for any repairs or replacements.

Most home warranties come with an annual fee. In addition, when a technician arrives at your home to repair or replace an appliance or perform regular maintenance, you’ll have to pay a service fee as well. It’s worth noting the distinction between a home warranty and homeowners insurance. Homeowner’s insurance protects your home from covered losses and damages, and most lenders require its. On the other hand, a home warranty is typically not a requirement. 

What to Expect From a Home Warranty

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If a covered system or appliance in your home needs to be repaired or replaced, you first need to file a claim. Your warranty provider will then assign a pre-screened technician to evaluate the issue. Once the technician has determined which service you need, they will find out if your home warranty covers the service. If it is, the technician will perform a repair or replacement as needed. 

If you’re dealing with an issue that isn’t covered by the warranty, your claim will be denied. This means that you will be fully responsible for paying for the service. You’ll also be expected to pay the full cost of the technician that your home warranty provider originally sent you. 

Home Warranty Coverage: What’s Included?

Before you obtain a home warranty, knowing what kinds of systems and appliances are covered by the plan is helpful. Keep in mind that not every warranty will offer the exact same coverage. However, most plans cover repairing, replacing and servicing essential systems and appliances that aren’t directly related to your home’s structure. These may include any or all of the following:

  • Refrigerator
  • Dishwasher
  • Oven
  • Stove
  • Washer/dryer
  • HVAC system
  • Plumbing system
  • Electrical system

Some plans also include coverage for specific types of appliances and systems, such as major appliances or built-in systems. It’s crucial to read your warranty’s fine print to ensure you know what to expect. 

Home Warranty Coverage: What’s Not Included?

In addition to knowing what’s covered by your plan, you should also familiarize yourself with what’s not included in your warranty. Home warranties typically do not cover items that are covered by a separate type of warranty, such as a retailer’s or manufacturer’s warranty. Some plans may also exclude certain systems or appliances that are included in other plans. When researching warranties, always make sure that you understand the full extent of your coverage so there are no surprises. 

What to Know About Home Warranty Costs

Every plan is different, but you can expect your home warranty to cost at least a few hundred dollars per year. The cost of your warranty depends on several factors, including your specific plan, your geographic region, and your provider. Generally speaking, the less you pay for your home warranty, the less coverage you’ll receive. The most basic plans won’t cover as many systems or appliances as pricier plans. 

If you’re unsure how much coverage you need, try to determine how much you would have to pay to repair or replace your most essential systems and appliances. Outdated or inefficient appliances will likely be more of a hassle to repair than newer appliances. In many cases, the amount of money you would save with a home warranty will outweigh the price of the plan. 

Find the Right Home Warranty for Your Needs

When looking for a warranty plan that’s a good fit for your home, it’s important to consider the coverage, the price and any additional fees. Every plan is unique, and the state of your home’s appliances and systems will heavily influence the type of warranty that best suits your needs. Regardless of your chosen plan, it’s important to ensure that your provider is upfront about what to expect. This transparency will help ensure that you get the most out of your plan and that there are no unwanted surprises. 

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