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What Does a Home Warranty Cover?

A home warranty can be a valuable form of peace of mind, especially when you buy an existing home. In exchange for an upfront premium, you gain coverage for many important systems in your home. If an appliance or home system breaks down or requires repairs, your home warranty can send a service technician out for repairs or replace the item in exchange for a low service fee. Home warranties typically cost $500 or less for a year and they may be purchased by a home seller, a home buyer, or an owner.

When buying a home warranty plan, it's important to understand how the plan works and exactly what is covered because coverage does vary by warranty provider. As a general rule, home warranties usually cover major components of your home like the HVAC systems, plumbing, electrical, and appliances. You can also customize your policy with add-on coverage. Here are the most common items covered by a home warranty.

1 - Most appliances are covered

A home warranty includes coverage for all types of home appliances, even if they are older, if they are in good working order. When choosing a policy, note which appliances are included, which are excluded, and which are only available with add-on coverage. Some appliances may be considered a home system such as a water heater. Some policies exclude specific appliances like dryers and washers.

The most common appliances covered by a home warranty include: dishwashers, refrigerators, ovens, ranges, cooktops, built-in microwaves, garage door openers, built-in food processors, sump pumps, washers, dryers, and water heaters.

2 - Major home systems are covered

One of the most valuable benefits of a home warranty is its coverage for the major systems of your home. Air conditioning, heating, and electrical repairs can easily cost hundreds or even thousands of dollars when something goes wrong but a home warranty covers repair or replacement for covered systems. Not all systems are covered, however. Coverage will depend on whether you are a home seller or buyer and whether you choose basic coverage or optional add-ons.

The most common home systems covered by a home warranty include: electrical; attic, exhaust, and ceiling fans; circulating pumps; central air conditioning, central vacuum systems; heating; plumbing; ductwork; and plumbing. Some policies even offer covered for limited roof leaks and septic tank systems.

3 - Appliances and systems regardless of age

Home warranties can be purchased to cover any appliance or system no matter how old it is. There are some qualifications for a system or appliance to be covered, however. Your appliance must be in good, safe working order. A home warranty typically won't cover an appliance or system that was broken already when you bought your warranty plan. The plan must also cover the specific type of system or appliance you have. For example, some warranty plans exclude coverage for washers and dryers, even if they are brand-new, while others include this coverage or make it available as add-on coverage.

4 - Non-mechanical components are not covered

A home warranty is only designed to cover the mechanical components of your home that are subject to wear and tear. This can include a wide range of appliances as well as home systems like plumbing, electrical, central air conditioning, refrigerators, and washing machines. Non-mechanical items like doors, windows, and walls are not covered. There may be some exceptions in your policy, though. Upgraded warranty plans may provide limited coverage for your roof, for example.

5 - Repairs and replacement are covered if you maintain your system

One of the most important things to understand about a home warranty plan is you are still required to keep up on home maintenance. If a covered appliance or system malfunctions or breaks down, you will need to call the warranty company which will send out a technician to investigate. The technician will first try to repair the problem. This can take time. If the problem can't be repaired, the warranty plan will pay to replace the system. Just be aware that your coverage is likely capped. If you make a claim for a water heater that can't be fixed, you may not receive reimbursement for the full cost of a brand-new water heater. You are also required to maintain your system for coverage. Your plan will not pay for a new air conditioner if you failed to change your air conditioner filters or have the system serviced for years.

6 - Emergency service is not covered

While a warranty company will attempt to expedite your claim if you are faced with an emergency like a broken furnace in the winter, home warranty plans are not designed to offer emergency repairs or replacement. It may take up to 5 days before a technician arrives at your home for a repair call. The technician will attempt to repair your system or appliance and this may involve waiting for parts to be ordered. Don't expect warranty service calls to be completed quickly.