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What Is a Home Warranty?

What Is a Home Warranty

Home warranties provide vital protection from costly appliance and system repair bills. They’re especially beneficial to new homeowners on tight budgets who lack experience managing household maintenance.

Before choosing a home warranty provider, do your research. Check their track record by consulting reviews on both their own website as well as third-party review platforms like Better Business Bureau.

What is a home warranty?

Home warranties are service contracts designed to cover repairs and replacement costs associated with normal wear and tear to appliances and systems in a home when they break down due to regular use. It typically pays for an authorized service provider to come out to the home to assess and diagnose the issue before either repairing or replacing as necessary.

Determining whether or not a home warranty is right for you depends on how much peace of mind it offers and whether or not you have an emergency expense fund to cover unexpected repairs. To learn more about its pros and cons, carefully read your contract documents, talk with service representatives for details, or look at sample contracts from companies’ websites. An appropriate contract should include standard and optional coverage details as well as exclusions that could void it as well as maximum payout limits per event or year.

An extended home warranty can be an ideal solution for new homeowners, particularly those purchasing used appliances and systems that may no longer be covered under their original manufacturer warranties or have expired. Furthermore, having such coverage provides peace of mind to buyers uncertain how well the house was maintained or built – particularly those buying older properties. However, please keep in mind that such policies won’t replace having homeowner’s insurance which covers damages from weather events, accidents and outside forces as well as having deductibles for system breakdowns.


Home warranties cost both an annual premium and service fee; the latter will vary based on which company and plan you select.

Homeowners experiencing problems with systems or appliances they own can call their home warranty company, who will send one of its service providers out immediately to assess and repair it – paying only a nominal service fee while covering the rest.

Home warranties often make financial sense due to their affordable price point compared with potential replacement or repair expenses for major appliances and systems, so many homeowners find them worthwhile. On the other hand, others may view paying premiums for services they may never use as money gone down the drain instead of saved into emergency savings accounts.

Home warranties can also be an attractive selling point for sellers who wish to entice potential buyers by providing an offer of protective service contracts. Sellers typically operate under tight budget constraints when selling their home and taking on another mortgage payment; having peace of mind that a buyer won’t later demand they cover costs related to system failure that were beyond their control is invaluable when selling. Although home warranties provide peace of mind, it should be remembered that their coverage may have limits; check with your warranty company beforehand about which repairs it will cover completely before signing any contracts!


Home warranties typically cover repairs or replacement of appliances and systems that break down due to normal wear and tear, although specific details vary based on company and plan. It’s essential that you read your contract thoroughly to understand its terms; some providers exclude foundation, wall and window repairs while others might exclude roof repairs or additional appliances.

As part of your research into home warranties, it’s crucial that you evaluate whether their coverage limits are aggregate (all claims combined) or per-item – meaning each system and appliance has an individual limit – this can make all the difference when assessing whether they’re worth purchasing for yourself as a homeowner. One good place to start would be looking at their reputation and customer service history along with reviews online.

Home warranties offer many advantages to homeowners, such as helping avoid expensive repairs and replacements. But sometimes nothing breaks or wears out, leaving the homeowner feeling their money was wasted by paying premiums and service call fees.

Note that a home warranty doesn’t cover things like natural disaster damage or theft (these types of problems should be covered by insurance policies instead). Also keep in mind that no amount of home warranties can replace an owner’s personal responsibility and diligence in taking care of their own home.


Home warranty companies provide plans that cover systems and appliances that break down due to wear-and-tear, deterioration or defects present at purchase time. While these service contracts often don’t cover repairs or replacement of windows, doors, floors or structural components; some policies offer coverage for smaller freestanding appliances like garbage disposals, dishwashers or trash compactors for an additional fee. There are even contracts that cover dryer damage, as you can see here:

Home warranty companies typically require that home systems and appliances are kept properly maintained before making a claim on them, with some restricting contractors or repair technicians you choose or even certain brands or models being excluded from coverage altogether. Furthermore, some contracts contain clauses mandating that contract holders seek second opinions before filing claims or making requests for repairs.

Home warranties can be an attractive feature in real estate transactions. They’re often included as part of the closing process and help ease transition into their new homes for those without knowledge about previous owner care or how a builder might perform repairs after completion of sale. It is crucial for homebuyers to carefully read any warranty contracts prior to making their decision and consult an exclusive buyer agent who can explain exactly what a plan covers and costs.

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