Home Warranty

What Does a Home Warranty Cover For Homeowners

Gustan Cho Associates are mortgage brokers licensed in 48 states

This guide covers a home warranty and how it works for homeowners. When you are looking to buy a house, you may ask the seller to give you a home warranty. However, sometimes you need to get the home warranty on your own. You need a home warranty if you inherit a house you want to keep. If you are purchasing homes for rental purposes, you need a warranty on each house. Use the tips below to avoid fatal errors when buying your first home warranty. Also, you must remember that every home and warranty will be different. This article will discuss the top mistakes to avoid when buying a home warranty.

What Is a Home Warranty?

A home warranty differs from homeowners insurance, as the latter provides coverage for the structure and belongings of your home in the event of fire, theft, storms, or other unforeseen catastrophes. In contrast, a home warranty specifically addresses the
regular wear and tear experienced by your appliances and systems, including but not limited to HVAC, plumbing, electrical, water heater, washer, dryer, oven, refrigerator, and other components.

A home warranty typically lasts for one year and can be renewed annually. You pay a premium upfront, which can range from $300 to $600 per year, depending on the level of coverage and the provider.

You also pay a service fee or deductible each time you request a service, varying from $75 to $125 per visit. When something breaks down or malfunctions in your home, you contact your home warranty provider, and they will send a licensed technician from their network to diagnose and fix the problem. If the item cannot be repaired, the provider will replace it with the same model or offer you a cash payout.

Buying a Standard Home Warranty

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Home warranty companies create home warranties that suit the kind of home you have. Some warranties are designed for small homes, and these warranties will have lower limits for coverage. You do not want to be stuck paying for something when you only need a slightly more powerful plan. The same is true for expensive warranty plans. If you are using an expensive home warranty with many coverage options, you might realize that you could never come close to reaching the maximum level of coverage. Because of this, you are overspending when you buy the warranty.

Does a Home Warranty Cover Everything 

Why 2. Assuming The Warranty Fixes Everything?The home warranty that you get does not automatically fix everything. You need to read the warranty’s fine print to know how much it covers. Some warranties do not cover the replacement of appliances, water heaters, or HVAC units. The warranty might pay for repairs, but you will be forced to pay for a new unit independently. Some warranties do not pay for water damage. Other warranties do not pay for garage doors and openers. You may come across a warranty that does not pay for carpentry repair, or you might find that the warranty does not cover wiring replacements. You need to read the warranty and decide what you are most comfortable with.

Assuming Someone Can Come To Your Home Right Away

When you call the home warranty company for assistance, they will contact a partner company in the area that will send a technician. That is the company that is supposed to help you with your repairs. The partners may be unable to come to your home immediately, and you may need to wait for the partner company to call you. If you are concerned about emergencies, you must check how the company handles these emergencies. Some home warranties offer an emergency line you can call for immediate assistance. However, other companies cannot help you. If you get someone else to solve your problem, you cannot send the bill to the warranty company for compensation.

Does The Home Warranty Company Reimburse Homeowners For Repairs

What does it mean Assuming that your home warranty company will refund your moneyThe warranty company can only help you if they send one of their partner businesses to your home to help you. You are wrong if you thought you could call any repairman you want. The warranty company expects you to call them whenever you need a repair. You are paying for the home warranty and need to ensure you get as much value out of it as possible. If the warranty company allows you to get reimbursement for certain services, you need to check their coverage limits. The warranty company may only pay so much for a repair done by a company they do not work with.

How Much Does a Home Warranty Cost

The warranty you buy for your home likely has a term attached. Some warranties last ten years, while others only last a few years. Because of this, you need to know when to renew the warranty. If the warranty is not renewed, you lose your protection.

If you forget that you have lost your protection, you will need to pay out of pocket the next time you have a problem at the house. Plus, you need to change your level of coverage if you ever make any improvements to the house.

You want to have a plan that can pay to repair the modern things you have added to the home, and you should consult the warranty company about altering your plan.

Why Is It Good To Have a Home Warranty

When you get a home warranty, you must ensure that it provides coverage that works for your home. You also need to get a plan with terms you are comfortable with. You should ask the warranty company if they allow for reimbursement, and you also need to ask them how they handle emergencies. All these factors will help you decide when purchasing your warranty.


If you own a home, you know how expensive and stressful it can be to deal with unexpected repairs or replacements of your appliances and systems. That’s why many homeowners opt for a home warranty, a service contract that covers the cost of
maintaining or fixing these items for a set period. But what exactly is a home warranty, how does it work, and what does it cover? And more importantly, how can you find the best home warranty plan for your situation? In this article, we’ll answer these questions and give tips on choosing the right home warranty for your needs.

What Are the Benefits of a Home Warranty?

A home warranty can offer several benefits, such as saving money by covering costly repairs or replacements of your appliances and systems. Giving you peace of mind that you won’t have to deal with unexpected breakdowns or hassles. Providing you access to qualified and vetted contractors who can handle any issue. Enhancing the value of your home and appealing to potential buyers if you decide to sell.

What Are the Drawbacks of a Home Warranty?

A home warranty can also have drawbacks, such as limitations on how much the provider will pay for each item or service. Exclusions on what items or conditions the plan covers can be frustrating. Homeowners can restrict who to use for service and when and how to request a service or file a claim. Deal with delays, disputes, or denials from the provider or the contractor.

What Are the Types of Home Warranties?

Different home warranties are available in the market, depending on what items or systems you want to cover and how much coverage you need—some common appliance plans. Appliance Plans home warranty cover only your major appliances, such as your refrigerator, dryer, washer, oven, dishwasher, microwave, and garbage disposal.

Appliance Home Warranty Plans are usually cheaper than other plans but offer less coverage. The cost of the Appliance Home Warranty plan is the least costly out of any other warranty plan.

A second type of warranty plan is a system plan: These plans cover only your major systems, such as your HVAC, plumbing, electrical, water heater, ductwork, smoke detectors, ceiling fans, and doorbells. They are usually more expensive than appliance plans but offer more coverage. Combination home warranty plans cover both your appliances and systems. They are usually the most comprehensive and costly plans but offer the most coverage. Another type of home warranty plan is customized plans: These allow you to choose which items or systems you want to cover from a list of options. They are usually more flexible and tailored to your needs but may have higher premiums or service fees.

How to Choose the Right Home Warranty for Your Needs?

Not all home warranties are created equal. Different types of plans, providers, and coverages are available. To choose the right home warranty for your needs, you should consider the following factors:

How much can you pay for the premium and the service fee? Compare different plans and providers and see what they offer for your price range.

What items do you want to cover, and how old are they? Some plans only cover basic items, while others offer more comprehensive or customized coverage. Some providers may have age limits or pre-existing condition clauses for particular objects.

The Benefits of Home Warranty Coverage

Where do you live, and what are your area’s common issues or risks? Depending on the local regulations, climate, or market conditions, some plans may vary by state or region. Some providers may also have limited availability or service areas in
specific locations. Who are you buying the plan from, and how reputable are they?

Check their ratings, reviews, and complaints from sources like Better Business Bureau, Consumer Affairs, or Forbes Home. Also, check their customer service, claims process, contractor network, and cancellation policy.

A home warranty is a worthwhile investment for homeowners who want to protect themselves from unexpected expenses and hassles related to their appliances and systems. However, not all home warranties are the same. You need to research and compare different plans and providers before buying one. You can find the best home warranty plan for your needs by following the tips above.

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