Discover essential information about home warranty protection, including how it differs from homeowners’ insurance, coverage options, and how it works. This guide helps homeowners understand the benefits of a home warranty plan to safeguard against unexpected repair costs for vital home systems and appliances.

Common Questions About Home Warranty Protection

Owning a home can bring unexpected expenses that standard homeowners’ insurance does not cover. To protect against these costs, many homeowners subscribe to a home warranty plan, which covers repairs or replacements of household appliances and systems not included in insurance policies. Unlike homeowners’ insurance, which covers damages from specific events like fire or storms, a home warranty focuses on fixing or replacing vital components such as HVAC units or plumbing when they break down.

If you're contemplating a home warranty, these insights can help you make an informed choice.

What is the main difference between a home warranty and traditional homeowners’ insurance?

Homeowners’ insurance covers damages from specific events like storms, fires, vandalism, hail, and certain water-related incidents. It also provides coverage for theft. However, it generally does not cover repairs or replacements of appliances or home systems unless the damage is caused by a covered peril. On the other hand, a home warranty offers service agreements that pay for repairs or replacements of covered appliances and systems such as plumbing, heating, or electrical units.

These plans usually cost between $250 and $500 per year, with premium options potentially reaching $1,000 based on the coverage selected.

How does a home warranty plan work?

A home warranty operates similarly to product warranties: it guarantees repair or replacement of specific home components. When an issue occurs, you contact the warranty provider, who sends a contractor to fix the problem. You pay an annual fee upfront, and the company handles repair or replacement costs for covered items when they fail.

What is typically included in a home warranty?

Coverage options differ by provider, but common inclusions are:

Basic plans often cover plumbing, dishwashers, ovens, garbage disposals, fans, sump pumps, water heaters, microwaves, tubs, and electrical systems.

Enhanced plans may also include central air conditioning, washers, dryers, refrigerators, and garage openers, usually for an additional fee.

Optional coverages might extend to well pumps, pools, spas, freezers, septic systems, and central vacuums.

Compare plans carefully to select coverage that best suits your home’s specific needs before making a decision.