What Does A Home Warranty Cover: Detailed Guide 2024

As a homeowner, you want to protect your home in case of unexpected repairs or replacements. This is where a home warranty comes in handy. But identifying a suitable plan is difficult, as it entails thorough research based on your requirements. Your research starts by asking a critical question to understand a home warranty policy- what does a home warranty cover?

This comprehensive guide will explore what a home warranty covers, including basic coverage, add-ons, and fine print. We’ll also examine the average home warranty cost and whether it’s worth the investment.

What Is Covered In A Standard Home Warranty

A home warranty covers repairing or replacing major home systems and appliances due to normal wear and tear. Look at the plans and appliances typically covered under a home warranty.

The basic coverage of a home warranty typically includes the following:

HVAC (Heating, Ventilation, and Air Conditioning) system
Electrical system
Plumbing system
Kitchen Appliances
Laundry Appliances
Garage Door
Roof Leak Repair

Optional Coverage

Most home warranty plans include other systems and appliances in their add-on packages. Some common add-on items are:

Pool
Spa Equipment
Stand Alone Freezer
Additional Spa
Trash Compactor
Ice Maker (In-Fridge)
Plumbing Fixtures
Septic System Pumping
Second Refrigerator
Lighting Fixtures
Lawn Sprinkler System
Freestanding Ice Maker
Grinder Pump
Pro-Series Range/Oven/Cooktop Coverage
Window Washing/Cleaning
Well Pump
Limited Roof Leak
Gutter Cleaning
Electronics Protection
Wine Cooler/Fridge
Water Dispenser Water Line
Pro-Series Dishwasher Coverage
Casita Guest Unit
Sump Pump
Water Softener
Pest Control
Swamp Cooler
Salt Water Pool
Instant Hot Water Dispenser
Central Vacuum
Carpet Cleaning
Ejector Pump
Generator

These are the three major systems that keep your home running smoothly. If any of these systems break down due to normal wear and tear, a home warranty will cover the cost of repairs or replacement.

What Does A Home Warranty Cover When Buying & Selling A House?

When buying or selling a house, a home warranty can provide peace of mind to both the buyer and seller. Here are some examples of what a home warranty may cover in these situations:

What Does A Home Warranty Cover When Buying A House?

Coverage for the buyer typically starts at the close of escrow or transfer of ownership and can last for a set period (often one year).

Many home warranty plans cover the major appliances and systems in the home (as discussed in the above section), providing the buyer with protection against unexpected repair or replacement costs.

If an issue arises with a covered item, the buyer can typically call the warranty provider to request service. The provider will send a qualified technician to assess the issue and determine if repairs or replacements are necessary. The buyer will typically pay a service fee for each visit.

What Does A Home Warranty Cover When Selling A House?

A home warranty can be a valuable selling point for the seller, providing added protection and reassurance to potential buyers.

Many home warranty companies offer seller coverage, which can help protect the seller during the listing period and can transfer to the buyer at the close of escrow. This can make the home more attractive to buyers and help the seller sell the home more quickly.

Seller coverage may cover the major appliances and systems in the home and can be customized to fit the seller’s specific needs.

It’s important to note that the coverage provided by a home warranty can vary depending on the plan and provider. When buying or selling a home, it’s essential to carefully review the terms and conditions of any home warranty plan to ensure that it meets your needs and provides adequate protection.

What Is Not Covered In A Home Warranty

As we now know what a home warranty covers, it is also necessary to find what items are usually excluded from these plans. No standard list of exclusions is followed by all companies, but most follow a similar trend. Most home warranty plans do not generally cover:

Systems or appliances with pre-existing conditions
Items without proper maintenance records
Improperly installed systems or appliances
Wear and tear of equipment due to misuse
Specific components of covered appliances and systems explicitly mentioned under excluded list of items in the service contract
Systems and appliances not explicitly mentioned under the covered list of items in the service contract
Structure of the house and other components covered by home insurance

Home Warranty Vs. Home Insurance: Differences In Coverage

Home Warranty and insurance plans cover different aspects of a household. A home warranty does not cover items covered under an insurance plan. Therefore, it is necessary to understand the difference in coverage offered by a home warranty and insurance.

Category	Home Warranty	Home Insurance
Purpose	Covers repairs and replacements of home systems and appliances	Covers damages to the structure of the home and personal property
Coverage	Appliances and systems, with limitations and exclusions	Property damage due to covered events, with limitations and exclusions
Covered items	HVAC systems, electrical systems, plumbing systems, water heaters, kitchen appliances, etc.	Damage to the home’s structure, personal property, liability, additional living expenses, etc.
Coverage exceptions	Coverage may exclude items with pre-existing conditions, or improper maintenance	Coverage may exclude certain types of damage or events, such as floods or earthquakes
Deductible	Service fees per claim	Deductible per claim
Claim Process	Service request made to a warranty provider for covered items	Claim filed with an insurance company for covered events
Coverage limits	Coverage is limited to the items specified in the contract,	Coverage limits are determined by the policy and the value of the home
Renewal and Cancellation	Coverage usually renews automatically unless canceled	Coverage can be renewed or canceled at the end of the policy term
Primary Beneficiary	Homeowners and buyers who want protection against unexpected appliance or system breakdowns	Homeowners who want protection against property damage and liability

Fine Print

It’s essential to read the fine print of your home warranty contract to understand what is and isn’t covered. Many home warranty contracts have exclusions for pre-existing conditions or poorly maintained items. Additionally, some contracts may have a limit on the number of service calls or the total amount of coverage for repairs or replacements.

Average Cost

The average cost of a home warranty varies depending on several factors, such as the type of coverage, location, and provider.

In general, the cost of a home warranty ranges from $300 to $600 per year. However, some providers may charge more or less depending on the level of coverage and additional services.

The table below lists various factors that might affect the cost of a home warranty and how it impacts it.

Factor	Impact On Cost
Type Of Coverage	Varies Based On Level Of Coverage And Additional Services
Location	May Impact Cost Due To Regional Differences
Provider	Varies Based On The Provider’s Pricing Structure
Age And Condition Of Home	May Impact Cost Based On The Risk Of Breakdowns Or Repairs
Age And Type Of Appliances/Systems	May Impact Cost Based On The Likelihood Of Breakdowns Or Repairs

It’s important to note that home warranty costs may also vary based on the age and condition of your home and the type and age of your appliances and systems. Additionally, some providers may offer add-ons or customization options that can impact the cost of your home warranty.

Is it Worth It?

Whether a home warranty is worth the investment depends on your circumstances. If you have older appliances or systems prone to breaking down, a home warranty can provide peace of mind and save you money in the long run. However, a home warranty may be unnecessary if your appliances and systems are relatively new and in good condition.