What Do Home Warranties Cover?

A home warranty is a service contract that helps homeowners to manage the financial burden of repairing or replacing certain service lines, systems, and appliances when they break down due to normal wear and tear or experience some sort of issue. It functions similarly to a car’s extended warranty, but for your house. For a monthly or annual fee, the warranty company provides coverage for a defined list of items in your home.

While preventative measures and routine care can go a long way when it comes to caring for your family’s home, unexpected breakdowns of major appliances and systems are a reality. Fortunately, a home warranty offers a layer of financial protection against these unforeseen events. Coverage details can differ between warranty providers and plan options, but most policies share a core set of protections designed to give homeowners peace of mind.

The specifics of coverage vary depending on the provider and the plan you choose. However, most plans typically cover major appliances and systems, including:

• Service lines: Water lines, sewer lines, natural gas lines, interior electric lines, and exterior electric lines.
• Appliances: Refrigerators, dishwashers, ovens, garbage disposals, washing machines, dryers, and sometimes microwaves.
• Major systems: Heating and air conditioning systems (HVAC), electrical wiring, plumbing systems (including water heaters and sump pumps).

Service lines

Service line warranties provide coverage for breakdowns of essential service lines. This includes the water lines that deliver fresh water to your home, the sewer lines that carry wastewater away, and the natural gas lines that fuel appliances like furnaces and water heaters. Damage to these lines can be disruptive and expensive to repair, and homeowner's insurance typically does not cover the cost of repairs or replacements. This is where a home warranty plan comes in handy. If a covered issue occurs, a warranty will handle the repair/replacement needed, up to a specific coverage limit specified in your terms and conditions. 

Appliances 

The inner workings of your home are further protected by coverage for major appliances. Modern refrigerators, dishwashers, ovens, cooktops, and garbage disposals are complex and often expensive to replace. A home warranty plan typically covers the cost of repairing or replacing these essential appliances depending on the cause of the breakdown and the terms of your policy. Washing machines and dryers, workhorses of any laundry room, are also commonly covered appliances. Some plans may even extend coverage to microwaves, those unsung heroes of quick meals and popcorn cravings. 

Major Systems and Home Appliances 

Beyond the individual components of your home, a standard homeowners’ insurancy policy likely doesn’t cover repairs or replacement needed for other major systems in your home. A home warranty can safeguard the major systems that keep your home comfortable and functional.  Heating, ventilation, and air conditioning (HVAC) systems are vital for maintaining a pleasant indoor climate year-round. Should your furnace malfunction in the dead of winter, or your air conditioner fail during a sweltering summer, the right home warranty plan could be a lifesaver. A home warranty may cover repairs or replacements of the HVAC system, depending on the issue's cause. Similarly, the complex network of pipes and fixtures that comprise your home's plumbing system may experience issues that are likely covered by a plumbing warranty. There are even water heater repair and replacement warranties available. This includes coverage for the water heater, the device responsible for providing hot water for showers, dishes, and laundry, and sump pumps, which help prevent basement flooding. 

Understanding the specific details of your specific home warranty plan is crucial. While this explanation provides a general overview of common coverage areas, it's important to review your plan documents to identify the specific appliances, systems, and service lines covered, along with any service fees or coverage limits that apply. Don't hesitate to contact your warranty provider with any questions. By familiarizing yourself with your warranty coverage, you can be better prepared to face the unexpected and ensure the smooth operation of your most valuable asset – your home. 

Benefits of enrolling in a home warranty

While not a substitute for a homeowners’ insurance policy, a home warranty offers a variety of valuable benefits:

• Stress-free repairs: Unexpected breakdowns can be a major headache. With a home warranty, simply contact the company and they'll arrange for a qualified technician to diagnose and fix the issue.
• Expert help at your fingertips: No more scrambling to find a reliable repair person. Home warranty companies have a pre-screened network of qualified technicians readily available to handle your repairs promptly and professionally.
• Protect your investment: As appliances age, the risk of breakdowns rises. Standard homeowners' insurance often excludes older appliances. A home warranty can provide valuable protection for these essential systems, safeguarding your investment.
• Say goodbye to DIY dilemmas: Don't have the time or expertise for repairs? A home warranty takes the guesswork out of the equation. Let the professionals handle repairs to your home systems, allowing you to focus on what matters most.
• Coverage for older appliances: As appliances age, the likelihood of breakdowns increases. A standard homeowners’ insurance policy typically excludes breakdowns of appliances beyond a certain age. A home warranty can provide coverage for these older appliances, offering valuable protection.

Things to consider before enrolling

Before enrolling in a home warranty plan, it's crucial to meticulously examine the fine print. Don't just skim the terms and conditions; take the time to fully understand what is and isn't covered. This includes understanding coverage limits, which dictate the maximum amount the home warranty company will pay for a repair or replacement. Additionally, be aware of exclusions, which are specific breakdowns or situations not covered by the warranty. It’s critical that you also identify any service call fees you may be responsible for. A thorough understanding of these details will ensure you get the most out of your home warranty.

Avoiding pre-existing condition headaches

Most home warranty companies have a clause excluding breakdowns caused by pre-existing conditions. To prevent any surprises down the line, it's highly recommended to have a professional inspection of your appliances and systems before enrolling in a plan. This inspection can identify any underlying issues that could potentially lead to a breakdown and subsequent denial of coverage by the warranty company.  Having a pre-inspection on record protects you and ensures a smooth experience when you do need to utilize your home warranty.

Don't get caught off guard by waiting periods

You should know that there's usually a waiting period before your home warranty coverage becomes active. This waiting period typically lasts around 30 days after enrolling in a plan. Understanding this timeframe is important to avoid enrolling and then immediately encountering a covered repair you mistakenly think will be covered. Factor in the waiting period when making decisions about repairs and ensure you have a backup plan in case something breaks down during the waiting period.

Choosing reliable service providers

The quality of the service technicians dispatched by the warranty company can significantly impact your overall experience. Before enrolling in a protection plan, take some time to research the reputation of the warranty company's network of service providers. Look for online reviews and ask around to see if friends or family have had positive experiences with the company's technicians.  By prioritizing a company with a network of reliable service providers, you can ensure your covered repairs are completed efficiently and effectively.

Home warranty vs. homeowners’ insurance

It’s important to understand the distinction between a home warranty and homeowners’ insurance. Homeowners’ insurance protects your home and its contents from covered damages from these like fire, theft, vandalism, and certain weather events. It may also offer some liability coverage in case someone gets injured on your property. A home warranty, on the other hand, focuses specifically on the repair or replacement of covered appliances and systems due to normal wear and tear.

Is a home warranty right for you?

The decision of whether or not to enroll in a home warranty depends on your individual circumstances. Here are some factors to consider:

• Age and condition of your home and appliances: If you have an older home or appliances with a higher risk of breakdowns, a home warranty may be a wise investment.
• Budget: Consider the cost of the warranty premium against the potential cost of repairs.
• DIY skills: If you’re comfortable troubleshooting and repairing appliances and systems yourself, a home warranty may not be necessary.

What do home warranties cover?

Home warranties offer a layer of protection against the financial burden of unexpected appliance and system breakdowns, such as with your washer, electrical systems, garage door openers, heating systems, air conditioners, septic lines, built-in microwave, kitchen appliances, well pumps, water lines, sewer lines, natural gas lines, and more. Warranties are available for both old and new homes, for new home buyers or for families who have been in their home for years. By carefully considering the coverage details, your budget, and your existing homeowners’ insurance policy, you can determine if a home warranty is the right fit for your needs by providing additional coverage your insurance company can’t provide.

Additional tips

• Get quotes from multiple home warranty companies before making a decision, and make sure you understand all your available coverage options.
• Read customer reviews online to get a sense of the home warranty provider’s reputation.
• Take a look at the frequently asked questions (FAQs) for warranty plans you’re considering enrolling in. The best home warranty companies will provide this information so you understand covered items.
• Understand how to make a home warranty claim with the provider, so if you have a covered issue with your service lines or if an appliance breaks, you know who to call.
• Be sure to carefully read through terms and conditions so you know whether a deductible needs to be paid when making a claim.
• If you’re a first time home buyer, check with your real estate company to see if they have any suggestions for home service warranty companies, or if they can provide you an area average for home warranty costs. Remember: warranty plans offer coverage for things standard home insurance policies don’t cover.
• Understand what manufacturer’s warranty is provided with your appliances before enrolling in coverage that you may already have.

Ready to take control of your homeownership experience and safeguard your budget from unexpected repair costs? Explore different home warranty plans available and choose the one that best suits your needs for your water lines and sewer lines, plumbing, and other service line and appliances. Remember, a home warranty can be a valuable tool to bring peace of mind, stress-free repairs, and convenience to your life and will likely handle repairs your standard homeowners’ insurance policy doesn’t cover.