The Basics of Home Warranties and What They Cover

Senior Editor

Broken washing machine leaking on the floor

As a homeowner, you understand the importance of safeguarding your investments. Purchasing a home warranty plan is a good way for homeowners to protect themselves from expensive repairs or replacements. In this article, we’ll explore the basics of home warranties and what they cover. Keep reading to learn more.

What is a home warranty?


A home warranty plan is an insurance policy that covers the repair or replacement of many of the major systems in a home, like the plumbing, electrical, and HVAC. It can also cover appliances and other items in the home. Home warranties can be purchased from home warranty companies and insurers. They are also usually offered through retailers when you buy a new appliance or furniture.

In more specific terms, a home warranty is a contract between a homeowner and an insurance company in which the company agrees to repair or replace home appliances and systems that break down due to normal wear and tear. Home warranties are popular among homeowners because they offer peace of mind, knowing that they will not have to pay for expensive repairs or replacements out of pocket.

What do home warranties cover?

Home warranties typically cost between $300 and $500 per year, and they cover most (but not all) repairs and replacements. There are usually limits on how much the warranty company will pay for each repair or replacement, so it is important to read the terms and conditions carefully before purchasing a policy. Home warranties also do not cover damage caused by neglect or abuse, so homeowners should be careful not to overload their electrical outlets or run water over their frozen pipes.

Home warranties are a great way to protect against costly repairs, but they should not be considered a substitute for regular home maintenance. Homeowners should still have their heating and cooling system inspected every year, change their furnace filter every three months, clean their gutters regularly, etc.

How does home warranty coverage work?


When a major system or appliance in your home breaks and it’s covered by your home warranty plan, you will first need to call the company and report the issue. They will then put you in touch with a local contractor or technician who can come out to your home and assess the damage.

If the damage is covered by your warranty, the contractor will repair it or replace the broken part. If the damage is not covered by your warranty, you may still be able to get it repaired or replaced, but you will have to pay for it yourself.

It’s important to note that the homeowner must be the one filing the warranty claim. In some cases, if the homeowner is not available or able to file the claim, then someone else authorized by the homeowner may do so. For example, a relative or friend may be authorized to act on behalf of the homeowner if they are out of town or unable to file themselves.

When should you purchase a home warranty?

Home warranties can be a lifeline for homeowners when the unexpected occurs. A home warranty can cover expensive repairs and help you replace valuable appliances. In the event of a disaster, you can rest easy knowing you are financially protected.

Before purchasing a home warranty, there are a few things you need to consider:

  • The age of your home: Most warranties do not cover homes that are over 10 years old.
  • The type of materials used in your home: Warranties typically do not cover pre-existing problems, so if your home has outdated materials or was built before 1978 (when lead paint was banned), it may not be covered by a warranty.
  • The size of your home: Warranties usually only cover single-family homes and not multi-unit dwellings like apartments or condos.
  • Your budget: Home warranties can be expensive, so make sure you’re comfortable with the price before purchasing one.

If you’re still unsure whether or not you need a home warranty, talk to your real estate agent or insurance agent for advice.

Overall, home warranties are an important tool for homeowners that can help protect them from costly repairs and unexpected expenses.