What Do Home Warranty Products Protect?

If you are a homeowner, you may have wondered what a home warranty covers? 

What Is a Home Warranty?

It is different from a home insurance policy.

Most homeowners know what house insurance covers. If the structure of your house and all your personal belongings within the house and on your property are damaged due to fire, theft, weather issues or accidents, you are protected.

Home warranties work a little differently.

For example, if your dishwasher leaks, your house insurance will pay for any water damage, but it does not repair the dishwasher.

A home warranty will pay for the dishwasher repairs, but not the water damage.

What Does a Home Warranty Cover?

Home warranties provide discounted repair and replacement services for household appliances and systems. If you want one of these plans you should get several home warranty quotes.

With a home warranty, you pay a monthly or annual fee. In exchange, you get a set service call fee every time an appliance or system breaks down.

Most plans do not require you to provide maintenance records or get an inspection to buy coverage, and it doesn’t matter if your home is brand new or decades old.

Home warranties on newly built homes typically have coverage time limits, such as 10 years for structural defects; two years for HVAC, electrical, and plumbing systems; one year for walls and paint; and six months for appliances.1

Most home warranty companies offer plans that cover either appliances or systems—and hybrid plans that cover both. An appliance plan typically covers:

• Attic fans

• Garbage disposals

• Bathroom exhaust fans

• Instant hot water dispensers

• Built-in food centers

• Kitchen fans/exhaust hoods

• Built-in microwaves

• Ranges/ovens/cooktops

• Built-in trash compactors

• Refrigerators

• Dishwashers

• Refrigerator ice makers

• Freestanding ice makers

• Wall ovens

• Garage door openers

• Washers/dryers

Appliances can be expensive to repair or replace but breakdowns of a major household system can cause serious financial hardship. You can choose a home warranty plan that covers systems, either as a stand-alone plan or combined with an appliance plan. These plans typically cover:

• Attic fans

• Humidifiers

• Built-in whirlpools/jetted tubs

• Interior electrical

• Burglar and fire alarms

• Plumbing (excludes fixtures)

• Ceiling fans

• Re-key services

• Central air conditioning

• Smoke detectors

• Central home heating

• Sump pumps

• Central vacuums

• Telephone lines 

• Doorbells

• Toilets

• Ductwork

• Water heaters

Standard plans may not cover all the appliances or systems you have in your home. However, most companies offer add-ons at an added cost. Here are some common add-ons:

• Extra air conditioners

• Pools/saltwater pools

• Extra hot water heaters systems

• Extra ranges/ovens/cooktops

• Spas

• Extra refrigerators and freezers

• Stand-alone freezers

• Electronics

• Sump pumps

• External water or sewer lines

• Tankless water heaters

• Faucets and fixtures

• Water softeners

• Food loss

• Well pumps

• Guesthouses

• Whole-house humidifiers

• Lawn sprinkler systems

• Wine refrigerators

Home Warranty Coverage Limits

Annual coverage limits will determine how much the company will pay to diagnose, repair, and replace each covered item. These coverage limits can vary dramatically for different companies. One home warranty plan might cap coverage at $500 per appliance, while another might cover up to $5,000 per item. There may be separate caps for each item, such as $500 for the washing machine and $1,000 for plumbing.

All plans also have aggregate limits. The total amount the company will pay for all covered losses during a single year may be limited to $5,000 per item or a combined total for all claims of $15,000.

What Don’t Home Warranties Cover?

Some of the issues that home warranties don’t cover include (but are not limited to):

• Structural issues, foundations, walls, paint, and flooring

• Solar systems and components

• Commercial-grade equipment or systems, such as Bosch, GE Monogram, Sub-Zero, Thermador, and Viking

• Anything a home inspector has previously uncovered 

• Pre existing conditions and normal wear and tear

• Problems related to rust, corrosion, and sediment

• Repairs related to improper maintenance, installation, design, manufacturer defect, or previous repairs (outside of the contract)

• Nonessential components include items that covered items that don’t need to function, such as oven racks, remote controls, clocks, and timers

• The identification, detection, abatement, and removal of hazardous substances, e.g., asbestos, radon gas, and mold

• Services to correct building and zoning code violations

Home warranty cover on a new home should begin immediately. For warranties on existing homes, you’ll probably have to wait 15 to 30 days before you can make a claim.

The Bottom Line

A home warranty compliments a house insurance policy to provide you with peace of mind and limit the costs you will face in the event of any breakdowns of appliances and systems needing diagnoses, repair or replacement.

If you’re considering a home warranty, get several quotes, and be sure to read the contract very carefully before you sign on the dotted line. Make it a point to understand what’s covered, what’s not, and how the coverage limits work.