What Does Home Warranty Cover?

Buying a home comes with a lot of responsibilities, including the risk of unexpected repairs that can quickly become expensive. That’s where a home warranty comes in—it’s a service contract that helps cover the cost to repair or replace major systems and appliances if they break down due to normal wear and tear.

Whether you’re buying a home in Phoenix, AZ, Charlotte, NC, or Indianapolis, IN, this Redfin guide will walk you through what a home warranty typically covers, what’s excluded, and why understanding the details can help you decide if it’s the right protection for your new home.

What is home warranty?

A home warranty, sometimes referred to as a home protection plan, is a service contract that helps pay for repairing or replacing major home systems and appliances when they fail due to everyday use. While homeowners insurance focuses on sudden events like fires or storms, a home warranty is intended to cover issues that come up over time from normal wear and tear.

A home warranty can be a helpful way to manage unplanned repair costs. For example, if your dishwasher breaks down unexpectedly, a home warranty may cover a portion of the expense to fix or replace it. This can help you handle surprise problems without putting a big dent in your budget.

How much does a home warranty cost?

A home warranty usually costs between $300 and $700 per year, depending on the level of coverage and the provider. In addition to the annual premium, you will also pay a service fee, typically ranging from $75 to $125, each time you request a technician to diagnose or repair a covered appliance or system. These fees help cover the cost of labor and encourage responsible service requests.

What is typically covered by a home warranty?

A home warranty can help protect many of the essential systems and appliances you rely on every day. While coverage varies by provider and plan, here are some common items included:

• HVAC systems: Central heating and cooling units, ductwork, and related components
• Plumbing systems: Interior pipes, toilets, water heaters, and plumbing lines
• Electrical systems: Wiring, circuit breakers, electrical panels, and connections
• Major kitchen and laundry appliances: Refrigerator, oven, built-in microwave, dishwasher, garbage disposal, washer, and dryer
• Roof leaks: Some plans provide limited coverage for repairs to leaky roofs
• Septic systems or well pumps: Select policies may also cover repairs to these systems
  

Keep in mind that home warranties generally don’t cover pre-existing issues, improper installation, cosmetic damage, or items still under a manufacturer’s warranty.

When is an appliance or system covered?

An appliance or system is typically covered by a home warranty if it breaks down due to normal wear and tear and was in good working order when your coverage began. Most plans start coverage after a brief waiting period, usually about 30 days.

To be eligible for coverage, check that:

• The item is included in your specific warranty plan
• The failure happens because of normal use, not poor installation, neglect, or accidental damage
• There were no known pre-existing problems when the contract started

>> Read: Cleaning and Maintaining Your Kitchen Appliances

Will a home warranty replace an item if it can’t be repaired?

Now you might wonder: what happens if a broken item can’t be repaired? Oftentimes, the home warranty will cover its replacement, but this depends on your plan’s terms and payout limits. 

Scenario 1: Replacement covered

Your refrigerator’s compressor fails and can’t be repaired. Since your warranty plan covers replacements and the cost is within your plan’s payout limits, the company pays to replace the refrigerator. You would still be responsible for the standard service fee.

Scenario 2: Replacement not covered

Your washing machine breaks down beyond repair, but it’s either excluded from your warranty plan or the replacement cost exceeds your coverage limit. You would pay the service fee for the technician’s visit and cover the full cost of a new machine yourself.

Your service agreement outlines what isn’t covered, including specific appliances, systems, parts, or situations where coverage may be denied. Be sure to read these exclusions closely so you fully understand what the plan does and doesn’t include before you buy.

What are coverage limits in a home warranty?

Every home warranty plan includes coverage limits. These are the maximum amounts the company will pay to repair or replace a covered system or appliance. Limits depend on the warranty provider and the plan you choose.

 For example, a plan might cover up to $1,500 for an HVAC repair and $500 for a built-in microwave. If the cost is higher than the coverage limit, you will have to pay the difference. Some companies also have annual caps on total payouts across all claims. It is important to read your contract carefully so you know what your limits are before you need to file a claim.

What is an add-on option?

Even the most comprehensive home warranty plans don’t cover everything in your home, which is where add-on options come in. An add-on option is extra coverage you can purchase to protect items that fall outside standard plans. 

Common add-ons include coverage for pools, septic systems, well pumps, second refrigerators, or roof leaks. While these options usually cost more, they can give you added peace of mind if you rely on special features or appliances.

>> Read: Is a Home Warranty Required? Tips to Decide if it’s Right for You

Is a home warranty the same as homeowners insurance?

No, a home warranty and homeowners insurance are not the same. They serve different purposes and cover different types of problems.

>> Read: Home Warranty vs. Home Insurance: Do You Need Both?

When to expect service after filing a claim

After you file a claim, most home warranty companies will assign a technician within 48 hours. Response times can vary depending on the issue and your location. For emergencies, such as a complete loss of heating in winter or a major plumbing leak, many providers try to send help within 24 hours. For non-urgent problems, it may take a few days to schedule service. Once your claim is approved, you will be contacted to set up the appointment at a convenient time.

Why do home warranties deny claims?

Home warranties can be a helpful safety net when covered appliances or systems break down, but not every claim will be approved. Here are some common reasons why a home warranty company might deny a claim:

• Lack of maintenance: If the item failed because it wasn’t properly maintained, the warranty company may reject the claim.
• Pre-existing conditions: Many plans exclude damage or malfunctions that existed before your coverage started. If an inspector or technician determines the issue was already present, it won’t be covered.
• Improper installation or code violations: Appliances or systems installed incorrectly or not up to code are often excluded. For example, if an electrical panel wasn’t installed by a licensed professional, repairs might not qualify.
• Non-covered components: Your contract lists exactly which parts are covered. If the failure is due to an excluded component, like cosmetic defects, structural damage, or certain accessories, the claim will likely be denied.
• Exceeded coverage limits: Each plan has dollar limits per item or per contract term. If the cost to repair or replace exceeds those limits, you’ll be responsible for the difference.
• Delayed reporting: Most home warranty companies require you to report problems within a set time frame after discovering them. Waiting too long can result in a denied claim.

What to know before buying a home warranty

A home warranty can provide peace of mind, but it’s important to understand what you’re getting. Here are a few things to consider before you buy:

• Coverage details: Each plan lists exactly what’s covered and what’s excluded. Read the contract carefully so you know which systems and appliances are protected.
• Service fees: You’ll pay a fee each time you request a repair visit. Make sure you understand how much it is and how often it applies.
• Coverage limits: Many plans have dollar limits per repair or per year. If a repair exceeds these caps, you’ll have to pay the difference.
• Pre-existing conditions: Most warranties won’t cover issues that existed before your policy started.
• Maintenance requirements: You’re usually responsible for keeping systems in good working order. Neglect can lead to denied claims.
• Claim process: Learn how to file claims and what documentation you’ll need.
• Company reputation: Research the warranty provider’s reviews and ratings to see how they handle claims and customer service.

>> Read: Home Maintenance Checklist for First Time Homebuyers

Wrapping it all up

A home warranty can be a valuable safety net, helping you cover unexpected repair costs and keep your home running smoothly. But it’s not a one-size-fits-all solution. Before you commit, take time to understand what’s covered, how claims work, and what’s expected of you as a homeowner. 

FAQs: What does a home warranty cover?

1. How long does a home warranty last?

Most plans last 12 months and can be renewed each year.

2. Do I have to use the warranty company’s contractors?

Yes—usually the company will assign an approved technician to handle repairs.

3. Can I transfer my home warranty if I sell my house?

Often, yes. Many warranties can be transferred to the buyer, sometimes for a small fee.

4. Is there a waiting period before coverage starts?

Typically, there’s a 30-day waiting period before you can file a claim.

5. Does a home warranty cover damage from natural disasters?

No. Events like floods, fires, or earthquakes are covered by homeowners insurance, not a home warranty.

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