As a homeowner, I regularly have to deal with costly repairs and replacements of old parts or some things that the kids broke while playing. After spending a few hundred dollars, I came across companies offering a home warranty. At first, I wasn’t sure what it entailed, that’s why I decided to do some research. Here’s what I found. 

What does a home warranty cover? A home warranty covers most parts of home systems like plumbing, water heaters, air conditioners, electrical appliances, and more.

Some companies offer a home warranty that covers regular appliances like stoves, washers, refrigerators, and dryers.  You’ll find some companies that allow you to get extra coverage for your pumps, swimming pool, spa, or refrigerators. 

In this article, we dig deeper and look at what exactly a home warranty cover is, and how it works.

What Is A Home Warranty Cover?

A home warranty is a contract that covers any mechanical wear and tear of systems and appliances in your house.  A home warranty covers the replacement or repair depending on what’s listed on the contract. 

A home warranty may also cover repair or replacement due to standard usage, failure, or other problems that may come with age. 

There are different home warranty plans, with each depending on coverage and cost.  The first plan covers a specific appliance; this could be the AC system or the refrigerator.  The second plan includes different devices like the dishwasher, AC, and the fridge, while the third will take care of appliances like an electrical system or HVAC. 

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How Does A Home Warranty Work?

If you experience a system failure or break down, you need to call the home warranty company.  The company will set up an appointment if the fault is part of your plan with them. A pre-screened and licensed service provider in your location will come to assess the situation, check your coverage, and recommend the next course of action to take in regards to your appliance. 

You’ll need to pay the service call fee which depends on your home warranty company. The company will cover the extra costs associated with the repair or replacement of your system. 

Is There A Difference Between A Home Warranty And Home Insurance?

Yes, they are different.  Homeowner’s insurance covers any damage that could occur to your possessions due to a flood, fire, or theft. However, a home warranty focuses on essential systems and appliances that keep your home functional. 

Another difference is that a home warranty plan doesn’t need a deductible payment. You only need to part with a service call fee. It’s optional to get the homeowner’s warranty coverage as mortgage lenders do not pay much attention to it like they do a homeowners insurance. 

How Much Does A Home Warranty Coverage Cost?

You can get a plan from $300 to over $500 a year, although this is dependent on the coverage.  Sometimes home warranty companies provide extra coverage for the same price. Also, the companies may have discount policy prices for new homeowners. The policies are prepaid for a year in advance, and you can renew the policy when it expires.

What Is In A Home Warranty Cover?

What does a home warranty cover?  Some of the items covered include:

Temperature And Water Systems

Some companies offer a warranty for your heating and cooling systems to ensure that your living space is comfortable. Repairing or replacing a heating and cooling system is expensive, but the right home warranty coverage can help cut these costs. 

The coverage can cover air ductwork, HVAC system, water heater, central vacuum, electrical systems, heating systems, and the AC system. 

Kitchen Appliances

You’re likely to use your refrigerator or cooktop every day. In case of a breakdown, you may incur hefty costs for a repair if you don’t have a home warranty. Some of the appliances that may be covered include a dishwasher, refrigerator, microwave oven, standalone freezer, garbage disposal, cooktop, or plumbing stoppage. 

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Outdoor Appliances

A home warranty can cover essential mechanical parts of outdoor pools and spas. You can also include the garage door opener and a lawn sprinkler system as part of your home warranty cover. Typical pool repair can be over $500. 

Laundry Room Appliances

Daily use of washers and dryers can lead to mechanical mishaps due to wear and tear. You may need to part with hundreds of dollars to get unique parts and hire a service professional. Getting home warranty coverage for your washer and dryer can reduce these costs.

Plumbing Systems

Plumbing issues can be frustrating and costly to handle. Trying to do the repairs on your own can lead to more problems. The right home warranty coverage can cover the sump pump, well pump, septic systems, and plumbing stoppage to ensure that your home is functional. 

Various parts of the above systems will be covered depending on your home warranty. You need to read the contract to understand what is included in the plan. 

Home Warranty Exclusions

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It’s essential to understand that every home warranty company has some exclusions on their contract. The exclusions could mean it would be more affordable to get the appliance repaired or replaced than what the company would charge you for the service call fee.  In some cases, the home warranty company may find it too expensive to pay for your appliance or system. A home warranty cannot cover each repair, that’s why most premiums are low.

It’s crucial to understand that home warranties do not cover lack of maintenance. Failure to regularly maintain your systems can cause them to work harder, which means they will wear out quicker than expected. 

Most companies want to ensure that the homeowner attempts to maintain their appliances to keep things functional around the house. 

What’s more, home warranties may not cover known conditions.  For example, if you mentioned that some items might need to be replaced or repaired during a home inspection, these items may not be covered by a home warranty.

A home warranty coverage won’t take care of an appliance that’s already in poor condition. If you moved into a house that needs multiple repairs or replacements, ensures you get a discount to foot these bills. 

Considerations When Getting A Home Warranty Coverage

Now that you know what’s and what’s not covered in a home warranty, you may want to shop around for the best coverage provider. Some of the tips that may come in handy when you need to choose a provider include:

Decide On What You Need To Be Covered

Most home warranty companies have two different plans with varying coverage. You’ll notice that some companies provide a plan for appliances, and the other for home systems like plumbing or heating. Others have coverages that cater to both appliances and systems but a different extent.

A cheaper plan may cover a few appliances and systems. It’s vital to decide on which appliances and systems you want to include before committing to a specific plan and company.  With this information, you can settle on a coverage plan and choose a home warranty company.

Find A Company Within Your Area

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You need to look for companies that cover your specific area.  A company within your area is likely to have the most technicians and contractors. Also, when looking at the companies, you need to opt for companies with 24/7 customer service.

Remember that your plumbing system could break down in the middle of the night. You want a company that can send a technician as soon as possible. Find out from others if the company provides around the clock customer service. 

Understand The Coverage Plans

Although most companies have set coverage plans, you’ll be better off with a company that allows you to come up with a customizable proposal. With this plan, you can choose the items you want to be included in the coverage. 

Find Out If There Are Deductibles Or Customizable Fees

Although a home warranty provider covers the expenses of the repair, you’ll need to pay a service call fee. A few companies have a fixed price, while others provide you with a range to choose. An expensive cost may get you a cheaper plan, and a reasonable fee may mean settling for a costly plan. The latter is more flexible. 

Read The Contract

You need to read the contract to find out more about the exceptions to coverage, restrictions, and any limitations. The best part is that you can read the sample contract in the FAQ section of the company’s site. 

Final Thoughts

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What does a home warranty cover? A home warranty covers major appliances like your refrigerator, AC, dishwasher, or microwave. You can select a plan to include more appliances like the well pump, clothes washer, pool, or spa. Speak to your preferred home warranty company and select a plan that works for you.

The right home warranty cover will save you some dollars and time spent looking for a technician. Don’t forget that claims may be rejected due to insufficient maintenance or pre-existing problems. Always read the fine print before settling for a home warranty service provider. 

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