What Does a Home Warranty Cover?

A home warranty offers protection when an important home item fails, saving you from paying expensive out-of-pocket costs. With so many home warranty companies claiming to offer the most comprehensive coverage, it may be challenging to find the best option for your needs.

You may be asking yourself, “What does a home warranty cover?” In this guide, we’ll help you learn what to expect when purchasing a service contract, including typical coverage, pricing, and limitations.

Want to know the best part?

We highlight our top-recommended provider at the bottom of the article to help you choose the right company for you.

What’s Covered by a Home Warranty?

Typically, home warranty coverage includes, at least in some aspects, all of the essential systems and appliances you rely on throughout the home. While the extent of coverage may vary significantly between home warranty providers, a policy will generally protect components necessary for operation.

In case you didn’t know:

Home warranties cover more than just systems and appliances. Many cover other common home items such as lawn sprinkler systems, pools, roofs, and much more.

It’s common for providers to break up their home warranty plans by systems and appliances. For instance, a systems-only plan may be sufficient when protecting your air conditioning and electrical system. On the contrary, an appliance plan provides financial assistance when your refrigerator or dishwasher breaks down. Most home warranty companies will also include a combo plan where both systems and appliances are under warranty.

Here are just a few of the systems and appliances that are covered under a home warranty

It gets better:

Home warranty providers include the option to purchase optional add-ons to a service contract.

Here are a few common add-ons provided by home warranty companies: 

• Extended electronic warranty
• Food spoilage due to broken refrigerator
• Guest units
• Limited roof leaks
• Pest control services
• Pre-season HVAC maintenance
• Re-key service for doors
• Secondary appliances or HVAC systems
• Septic tank and pumping
• Swimming pool and spa equipment
• Well pump

We recommend analyzing a sample service contract before signing up for coverage to understand how extensive the coverage is for both the bundled packages, as well as add-ons.

What Does a Home Warranty Not Cover?

Home warranties don’t cover all types of repairs. Here are some common equipment malfunctions that providers almost always disqualify under home warranty coverage:

• Cosmetic issues
• Damage caused by improper installation or maintenance
• Misuse of an appliance or system (using it for purposes other than residential use)
• Pre-existing conditions at the time a home warranty begins

Find out the specific exclusions from a provider by asking a representative or looking for coverage limitations in a sample contract. In addition to excluded repair causes, you should also check the maximum payouts for both appliances and systems. Sometimes, a home warranty company will set limits on systems and appliances. Once the repair reaches the coverage limit, you’re required to pay any extra costs.

What Is a Home Warranty?

A home warranty is designed to do two things:

• Cover the repair or replacement of your system or appliance when a breakdown is caused by normal wear and tear.
• Send a vetted service provider to your home to diagnose and fix your issue.

This type of home appliance insurance protects homeowners from paying too much out of pocket and gives them peace of mind if something unexpected happens.

Though similar to homeowners insurance, a home warranty is different because it’s an optional policy that helps cover the costs of unavoidable breakdowns to your home’s systems or appliances. Homeowners insurance, on the other hand, is a mandatory policy that protects your belongings from unexpected events like storm damage, theft, or fire.

Compare what’s covered by home warranties and homeowners insurance in the chart below.

When Does Home Warranty Coverage Begin?

Most home warranty providers require a 30-day waiting period before coverage begins. Some companies, such as The Home Service Club, have only a 10-day waiting period before coverage kicks in. Some companies may allow a seamless transition with proof of uninterrupted service if there’s no lapse in coverage.

How Long Does Home Warranty Coverage Last?

In most cases, a home warranty lasts 12 months. Home warranties tend to renew after expiring. You may find discounted options available by purchasing a home warranty in 3- or 5-year intervals.

How Much Do Home Warranties Cost?

You might be thinking:

“Home warranties seem expensive. Wouldn’t I be better off saving the money for a repair?”

According to a survey of 1,000 homeowners we conducted in 2021, 76% said they paid $400 or more for a system or appliance repair.

On average, purchasing a basic home warranty plan costs around $300 a year, which is typically lower than the cost of many system or appliance repairs. For more comprehensive care, expect to pay around $600 a year. A comprehensive plan may include up to $20,000 worth of protection. A home warranty can level your budget since it pays for itself when a system or appliance breaks down.

How Much Do Service Fees Cost?

Policyholders are also responsible for a service fee, or a deductible, which is paid to a technician once they arrive on the scene to diagnose the malfunctioning system or appliance. Throughout the industry, these fees generally range between $75–$125 per issue.

If you’re still not sure which home warranty company is right for you, compare some of the best home warranty companies.

Because plan pricing will vary based on where you live, the square footage of your home, and the plan you choose, we recommend getting a quote from all three companies so you can compare coverage options and pick a plan that provides you with the best coverage within your budget.

Read the following company reviews to learn more about the home warranty companies we recommend:

• Select Home Warranty Review
• First American Home Warranty Review
• Liberty Home Guard Review
• Home Service Club Review

Our Top Home Warranty Provider

Liberty Home Guard (LHG) is our top recommended home warranty provider due to its solid coverage limits, customer service, and customizable coverage. It holds an A- rating with the Better Business Bureau (BBB) and 4.7 out of 5 stars on Google Reviews. Additionally, LHG provides a 60-day workmanship guarantee on all completed repairs, giving you peace of mind that your home is fully protected.

Liberty Home Guard Plans