A home warranty is a coverage plan that helps cover the costs associated with fixing, servicing, or replacing a home’s appliances and systems. In the case of a major system failure, such as an HVAC system fizzling out, a home warranty plan could save the policyholder thousands of dollars.
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This is What a Home Warranty Covers
Home Warranty vs. Home Insurance
Although both home warranties and home insurance plans help mitigate the costs of replacement or repair, they actually work quite differently.
Home insurance plans protect your home against disaster damage or loss, whether natural (e.g. fire), accidental (e.g. car crash), or criminal (e.g. burglary). When property is damaged or destroyed by a disaster, home insurance providers reimburse the policyholder.
Home warranty plans, on the other hand, provide coverage for the expected wear-and-tear costs associated with a home’s aging appliances and systems. When an appliance (e.g. oven) or system (e.g. HVAC) breaks down to natural wear and tear, a home warranty company pays to repair or replace the broken unit.
Types of Home Warranty Coverage
Home warranty companies typically offer three types of coverage packages:
- Systems and Appliances: Comprehensive coverage for systems and appliances, including HVAC systems, electrical systems, bathtubs, and more.
- Appliance-Only: Coverage that excludes systems, solely protecting appliances such as washing machines, refrigerators, and microwaves.
- Add-On: Á la carte protection for various household gadgets and items, such as computers, televisions, spa systems, and more.
Items Typically Covered by Home Warranties
Although every home warranty company offers unique coverage plans and packages, the following items are typically covered in a company’s most robust package:
Appliances:
- Kitchen appliances (e.g. oven, range, refrigerator, ice machine, stove, cooktop, dishwasher, and built-in microwave)
- Washing machine/dryer
- Garage door opener
Systems:
- HVAC
- Electrical
- Interior plumbing
- Water heater
- Ductwork
Add-Ons:
- Pool or spa equipment
- Computers, laptops, or tablets
- Televisions and home entertainment systems
- Septic tank
- Roof leaks
What’s Included with Home Warranty Coverage
Home warranty coverage typically comes with two primary benefits: coverage payouts and access to a contractor network.
A coverage payout is the amount of money you’d receive if a covered appliance or system malfunctions. Typically, customers don’t receive cash from these payouts; instead, the appropriate funds are sent directly to the contractors responsible for servicing or replacing your unit.
Coverage payouts usually come with limits. Although the specifics vary by contract, your coverage limit will set a maximum coverage payout for each covered item (which resets after the term limit). For example, $3,000 is a common limit for heating systems. If your heating system breaks and the cost of repair or replacement exceeds $3,000, you’d be responsible for any amount over the coverage limit.
A contractor network is a team of technicians and contractors who work on the behalf of your home warranty company to service policyholders’ units. Contractor networks simplify the process of requesting maintenance. When an appliance or system breaks down, there’s no need to hunt for a technician on your own; instead, submit a quick maintenance request through your home warranty company’s website and let company representatives contact and organize a technician to visit.
Does a Home Warranty Cover the Roof?
Most home warranty companies will not cover whole roof replacement or repair. Roof coverage is a popular add-on featured by many home warranty companies, but this coverage often only protects against small roof leaks.
Does a Home Warranty Cover Plumbing?
Plumbing is typically covered for leaks, blockage, or other forms of wear and tear. Many home warranty companies offer additional coverage for plumbing appliances such as septic tanks and sump pumps.
However, if a plumbing mishap causes damage to your home or belongings, this damage would not be covered by your home warranty.
Does a Home Warranty Cover Electrical Problems?
Most home warranty plans will protect against failures from wear and tear in the most vital components that make up your home’s electrical system. These components may include Direct Current (DC) wiring, electrical panels, lighting fixtures, built-in exhaust/vent/attic fans, and circuit breakers.
In the event of a lightning strike, power surge, or any other electrical incident that is not the cause of natural wear and tear, any resulting damages would not be protected.
Does a Home Warranty Cover HVAC?
Yes, most home warranty companies will include heating, air conditioning, and ventilation systems in their coverage plans. Air conditioning systems may sometimes be segmented into add-on coverage, depending on the type of unit (e.g. window unit vs central air system).
Does a Home Warranty Cover Windows?
No, windows are not usually covered by home warranty companies because they are neither a system nor an appliance.
Does a Home Warranty Cover a Garage Door Opener?
Home warranty companies often cover your garage door opener itself, but the details beyond this can get fuzzy. Many home warranty companies will not cover the garage door itself, or the track that the garage door follows.
The Items that Home Warranties Don’t Cover
These items are rarely covered by a home warranty:
- Systems and appliances that are damaged by something other than normal wear and tear.
- Systems and appliances that are not properly maintained or serviced, or that do not have the proper records to prove past maintenance and service.
- Systems and appliances with a pre-existing condition. Typically, a “pre-existing condition” is damage that occurred to your unit before the end of your waiting period (usually 30 days after signing).
- Systems and appliances that are designed for commercial use rather than home use.
- Anything that is not a system or appliance.
Always refer to your contract with your home warranty company for the most accurate coverage information. Your contract should contain everything: which items meet coverage, which components or parts of these items meet coverage, and under which conditions these items will be covered.
Finding the Right Home Warranty Company
The most important thing to remember about home warranty coverage is that it will change from company to company. For the most accurate coverage and pricing information, you should grab quotes from multiple companies.
For a head start on quote gathering, check out our list of the best home warranty companies. You’ll find detailed plan information, pricing estimates, and links that lead your right to your personalized quotes.
