Home warranties are designed to cover out-of-pocket expenses that occur when there is a home repair. They cover most home systems and major appliances, but every home warranty is a little different. So what exactly can you expect a home warranty to cover you for? We’ve reviewed major home warranty companies to get the most common coverages available to you.
How Home Warranty Coverages Work
A home warranty plan is often broken down into two types of coverage: systems and appliances. Systems include things like your plumbing, electrical, and HVAC system. Appliances are generally the major appliances such as a refrigerator or stove.
Every home warranty company will have its own set of systems and appliances that it covers. When a system fails or an appliance breaks, the warranty owner will call the warranty company, pay a trade service fee, and then the warranty company will send a service provider to assess and fix the problem.
Don’t be fooled by assuming that if something is covered, it is 100% covered. There are caps to systems and often to individual appliances that limit the amount a home warranty company will pay to remedy the issue.
Common Home Warranty Coverages
We can break down what a home warranty company covers in both systems and appliances coverage. Remember to shop for a company that offers coverage in the key areas you feel you have the biggest risk in.
The most common coverages are:
|Heating||Oven, stove, and range|
|Water heater||Clothes washer|
|Garbage disposal||Clothes dryer|
|Instant water dispenser||Trash compactor|
|Smoke detectors||Garage door opener|
|Central vacuum||Freestanding ice maker|
|Ceiling fans||Built-in food center|
Some home warranty companies offer plans that are systems-only plans, or appliance-only plans. Most companies offer a combo plan that combines coverage.
Additional Coverage Options
On top of the standard plans that any home warranty company offers, there are also additional coverage options available. These are offered for an additional fee and usually need to be selected at the start of the policy year.
Common additional coverage options include:
- Swimming pools, spas, and accompanying equipment
- Septic tanks
- Limited roof leaks
- Well pump
- Pre-season HVAC maintenance
- Guest units
- Re-key service
- Food spoilage due to broken refrigerator
Not every home warranty offers the same list of optional coverage. It’s important to read through the policy terms and company offerings to make sure you get the items covered that are important to you.
What Is Not Covered By a Home Warranty
Home warratnies are not blanked coverage for anything and everything that can go wrong with systems and appliances. In fact, there is often a long list of exclusions that you should be aware of. Reading through a sample contract will help you identify all exclusions.
In general, the following is not covered by a home warranty company:
- Pre-existing conditions at the start of the home warranty
- Damage caused by improper installation or maintenance
- Misuse of appliance or system
- Cosmetic issues
Remember that there are also caps to coverage. These caps means that there is a limit to the payout on any one claim or for an aggregate of claims over the course of the contract term. If a claim reaches the cap, you’re left paying for the remainder of the repair or replacement.
When Does Home Warranty Coverage Begin?
If you buy a home warranty, it’s important to note that your coverage doesn’t begin right away. The only exception is some policies will allow for immediate coverage when buying a home. Most policies have a 10 to 30-day waiting period.
Depending on the home warranty company, if you have a warranty and switch providers, there may be an option to have seamless coverage. Check with your provider about options.
Home warranties are usually good for anywhere from 12 to 14 months. At the end of the contract term, you’ll have the option to renew your policy for another term. This allows you to have ongoing coverage as you continue to stay in your home that continues to age.