What Does a Home Warranty Cover?
A home warranty covers service, repair, or replacement of major home appliances and systems. It can provide peace of mind, especially if covered items are older and no longer under the manufacturers’ warranties. Home warranties are considered a consumer product, so they aren’t the same as homeowners insurance. While insurance provides financial relief in case of unexpected perils like fire, wind, hail, vandalism, or theft, a home warranty covers specific appliances and systems listed in the contract. Home warranty coverage can minimize the expense of fixing or replacing big-ticket items that you might not have saved money for or factored into your budget.
Home warranty coverage varies, but there are some standard coverages for appliances and systems you can expect from most home warranty companies.
Typical Home Warranty Coverage
Systems:
- Electrical
- Ductwork
- Heating
- Interior plumbing
- Water heater
Appliances:
- Air conditioning (sometimes optional)
- Dishwasher
- Garage door opener
- Garbage disposal
- Pool equipment (optional)
- Oven, range, or cooktop
- Refrigerator (sometimes optional, may exclude ice maker)
- Spa equipment (optional)
Specific plans: Some home plans offer coverage for certain systems, such as heating, ventilation, and air conditioning (HVAC), interior plumbing, or electrical. There are also appliance-specific plans that work the same way. You might choose a warranty program like this if you only want to cover certain items that are no longer covered by a manufacturer’s warranty.
Optional coverage: Depending on where you live, you might want coverage for other home systems such as a sump pump, well pump, or septic tank. Keep in mind that some appliances that you might think are covered under a standard warranty could be listed as optional, such as a refrigerator or a built-in microwave. In addition, if you have more than one refrigerator in your home, you’ll likely need added coverage because home warranties cover only the primary kitchen refrigerator.
Robust plans: The most comprehensive home warranty plans often include coverage for appliances like free-standing ice machines, trash compactors, ceiling fans, and jetted bathtub motors and pumps. Others may even include limited roof or pest control coverage. You also can purchase coverage for a re-keying service, which is especially useful if you just purchased a home and want to change the locks.
What’s Included With Home Warranty Coverage
Home warranty companies set limits on how much they will pay for diagnosis and repair or replacement of covered home systems and appliances. The limit depends on the item.
Some warranty companies itemize how much they will pay for specific appliances, such as $500 for a garage door opener or $1,000 for a built-in microwave. Other companies provide a set fee for all appliances, which can be as much as $3,500 per appliance.
