Frequently Asked Questions About Home Warranty Coverage

Learn about home warranty plans, how they differ from homeowners’ insurance, and what is typically covered. This guide helps homeowners understand the benefits, operating mechanisms, and coverage tiers of home warranty services to make informed decisions in protecting their home systems and appliances.

Frequently Asked Questions About Home Warranty Coverage

If you're considering a home warranty plan, here are key points to help you decide wisely.

How does a home warranty plan differ from traditional homeowners’ insurance?

Homeowners’ insurance typically covers damages from specific events like windstorms, fire, vandalism, hail, and certain water damages. It also includes some coverage for property theft. However, it generally does not pay for repairs or replacements of appliances or home systems unless caused directly by covered perils. Conversely, a home warranty plan offers service contracts that pay for repairs or replacements of covered appliances and systems, such as plumbing, heating, or electrical components.

This plan usually costs between $250 and $500 annually, with premium options reaching up to $1,000 depending on coverage selection.

How does a home warranty plan operate?

Similar to product warranties, a home warranty plan guarantees repair or replacement of specific home components. When issues arise, you contact the warranty provider, which dispatches a contractor to address the problem. You pay an annual fee upfront, and whenever a covered item fails, the company covers repairs or replacement costs.

What does a typical home warranty cover?

Coverage options vary across providers, but common inclusions are:

Basic coverage often includes plumbing, dishwashers, ovens, garbage disposals, fans, sump pumps, water heaters, microwaves, tubs, and electrical systems.

Enhanced plans might extend to central air conditioning, washers, dryers, refrigerators, and garage door openers, usually for an additional fee.

Optional coverage may include well pumps, pools, spas, freezers, septic systems, and central vacuums.

Be sure to compare plans carefully and choose the coverage that best fits your home’s needs before making a decision.