Buying a home has many liability, including the risks of unexpected repairs that can quickly become expensive. That’s where housing guarantees come into play. It is a service agreement that helps to cover the costs of repairing or replacing a major system or appliance in the event of failure due to normal wear or tear.
Whether you’re buying a home in Phoenix, Arizona, Charlotte, North Carolina, or Indianapolis, this Redfin guide explains what your home warranty usually covers, excluded, and why understanding the details can help you determine whether understanding the details is the proper protection of your new home.
What is a home warranty?
Home warranty, sometimes known as a housing protection plan, is a service agreement that helps you pay for repairs or replacements of your main home system and appliances in the event of failure due to daily use. While homeowner insurance focuses on sudden events like fires and storms, home insurance is intended to cover issues that emerge over time from normal wear and tears.
A home warranty is a useful way to manage unplanned repair costs. For example, if your dishwasher breaks down unexpectedly, the home warranty covers some of the costs and can fix or replace it. This helps you handle surprise issues without putting a big dent in your budget.
How much does a home warranty cost?
A home warranty typically costs between $300 and $700 a year, depending on your coverage level and provider. In addition to annual premiums, you also pay service fees, which usually range from $75 to $125. Every time you request a technician to diagnose or repair the applicable appliance or system. These fees help cover labor costs and promote responsible service requests.
What is usually covered by a home warranty?
Home warranty helps protect many of the critical systems and appliances you rely on every day. Coverage varies by provider and plan, but here are some general items.
HVAC System: Central Heating and Cooling Units, Ductwork and Related Components Piping System: Interior Pipes, Toilets, Water Heaters, Piping Line Electric System: Wiring, Circuit Breakers, Electric Panels, Connection Major Kitchen and Laundry Appliances: Refrigerators, Ovens, Microwaves, Build-in Microwaves, Dishwashers, Decorative Equipment, Decorative Items, Clothing Sites, Cleaning Systems or Well Pumps to Leaky Roofs: Selection Policy may also cover repairs of these systems
Please note that home warranty generally does not cover existing issues, improper installation, cosmetic damage, or items that are still under the manufacturer’s warranty.
When will the appliance or system be covered?
The appliance or system is usually covered with a home warranty if it fails due to normal wear and tear and was functioning properly when compensation begins. Most plans begin coverage after a short waiting period, typically around 30 days.
To be eligible for compensation, please make sure:
Items are included in your specific warranty plan. There were no known issues when the contract was launched.
>>Read: Cleaning and maintaining kitchen appliances
Does the home warranty replace the item if it cannot be repaired?
Now you may wonder: what happens if you can’t repair a broken item? In many cases, a home warranty covers that alternative, but this depends on the terms of your plan and payment limits.
Scenario 1: Exchange is covered
The fridge compressor has broken and cannot be repaired. The warranty plan covers replacements and the costs are within the plan’s payment limits, so the company pays to replace the refrigerator. We will continue to be responsible for standard service charges.
Scenario 2: Exchanges are not covered
The washing machine will break down beyond repairs, but it is either excluded from the warranty plan or the replacement cost exceeds the coverage limit. You will pay a service fee for your technician’s visit and cover all costs for your new machine yourself.
Your service agreement outlines what is not covered, such as the specific appliance, system, component, or situation where compensation may be denied. Please read these exclusions carefully. That way, make sure you fully understand what your plan will do or does not include before you buy.
What are the coverage restrictions for home warranty?
All home warranty plans include coverage restrictions. These are the maximum amounts the company will pay to repair or replace a covered system or appliance. Limitations will vary depending on your warranty provider and the plan you choose.
For example, plans might cover up to $1,500 for HVAC repairs and $500 for built-in microwaves. If the cost is higher than the coverage limit, you will need to pay the difference. Some companies also have an annual cap on total payments across all bills. It is important to read the contract carefully before you need to file a claim.
What are add-on options?
Even the most comprehensive home guarantee plans don’t cover everything in your home. That’s where add-on options come into play. Add-on options are additional coverage that you can purchase to protect items outside of the standard plan.
Common add-ons include coverage of pools, purification systems, well pumps, second fridges, or roof leaks. These options are usually more expensive, but relying on special features and appliances can give you peace of mind.
>>Read: Do you need a home warranty? Tips to determine whether it’s right for you
Is the home warranty the same as homeowner’s insurance?
No, home insurance and homeowner insurance are not the same. They serve different purposes and cover different types of problems.
Home Warranty Homeowner Insurance covers repairs or replacements of major appliances and housing systems for normal wear and tears, due to normal wear and tears. Items from unexpected events such as fire, storm, or theft service agreements can help you spend time buying in the usual time-consuming issues that are necessary for commercial organizations, such as including broken wirings, including wirling wirings, including wirling protection, including broken wirings, so that they do not cover up broken dishwashers or obstacles. Compensation, liability protection, and personal property compensation
>>Read: Family Guarantee vs. Family Insurance: Do you need both?
When to expect service after submitting a claim
After submitting your claim, most home guarantor companies will assign a technician within 48 hours. Response times may vary depending on the problem and location. Due to emergencies such as complete winter heating loss or large plumbing leaks, many providers will try to send help within 24 hours. For non-urgent issues, service schedules may take several days. Once your request is approved, you will be contacted to set up an appointment at a convenient time.
Why does a household guarantee reject a claim?
A home warranty can be a useful safety net if the covered appliance or system collapses, but not all claims are approved. The common reasons why a home guarantor company may reject a claim are:
Lack of Maintenance: If the item fails because it was not properly maintained, the warranty company may refuse the claim. Existing Conditions: Many plans rule out any damage or malfunctions that existed before coverage began. If the inspector or technician determines that the problem already exists, it will not be covered. Improper installation or code violation: Appliances or systems that have been installed incorrectly up to the code are often excluded. For example, if the electrical panel is not installed by a licensed professional, repairs may not be qualified. Non-covered components: The contract lists exactly which parts are covered. If the disorder is due to an excluded component, such as a cosmetic defect, structural damage, or a specific accessory, the claim may be denied. Coverage Limits exceeded: Each plan has a dollar limit per item or per contract period. If the cost of repair or replacement exceeds those limits, you are responsible for the differences. Reporting delays: Most household guarantor companies must report issues within a set time frame after discovery. Too long can lead to rejected claims.
Things you need to know before purchasing a home warranty
While a home guarantee can provide peace of mind, it is important to understand what you are getting. There are a few things to consider before you buy.
Coverage Details: Each plan lists exactly what is covered and what is excluded. Read the contract carefully to see which systems and appliances are protected. Service Fee: You can pay for each time you request a repair visit. Understand how much it is and how often it applies. Compensation Limitations: Many plans have a repair or $1 per year limit. If the repair exceeds these caps, you will need to pay for the difference. Existing Conditions: Most warranty does not cover issues that existed before the policy was launched. Maintenance requirements: Usually you are responsible for ensuring that your system functions properly. Neglect can lead to rejected claims. Claim Process: Learn how to file a claim and the documentation you need. Company Reputation: Research warranty provider reviews and ratings to see how you handle billing and customer service.
>> Read: Home Maintenance Checklist for First-time Home Buyers
I’ll wrap it all
A home warranty can be a valuable safety net, covering unexpected repair costs and helping to make your home run smoothly. But it’s not a one-size-fits-all solution. Before committing, understand what’s covered, how the claims work, and what you’re expecting as a homeowner.
FAQ: What does the home warranty cover?
1.How long does the house guarantee last?
Most plans can be updated annually for 12 months.
2. Do I need to use a contractor from a guarantor?
Yes – Usually, the company assigns an approved technician to handle the repairs.
3. Can I transfer my home warranty once I sell my house?
Often, yes. Many guarantees can sometimes be transferred to the buyer for a small fee.
4. Is there a waiting period before coverage begins?
There is usually a 30-day waiting period before filing a request.
5. Does the home warranty cover damage caused by natural disasters?
no. Events like floods, fires, earthquakes and other events are covered by homeowner insurance, not home guarantees.
