Here’s How a Home Warranty Works and What It Covers

As any homeowner can testify, owning a house can be expensive. Whether you have purchased a new home or maintaining an older one, every house comes with hidden expenses. When your refrigerator goes out or when something goes wrong with the water heater or HVAC, the cost could easily reach thousands of dollars. If you haven’t budgeted for such a large bill, the cost could be prohibitive. A home warranty could a way of protecting your budget and your home.

After investing a significant sum into the purchase and upkeep of a house, dropping more money on a warranty might not be what a homeowner wants to do. Purchasing a home warranty, however, can help ease some of the financial strain when major appliances or home systems go out. A warranty might require some upfront cost but the ultimate savings could be worth the added expense. There are a few things to consider when looking at home warranties. Let’s take a look at how a home warranty works what it covers.

What is a home warranty?


A home warranty can be compared to an annual service contract. The agreement covers repairs or replacements of major home systems and appliances. Your warranty will step in to help cover the cost of things like air conditioners, refrigerators, and washers that have broken because of normal wear and tear. A home warranty can sometimes be confused with homeowners insurance, but they aren’t the same. Home insurance generally covers property damage and loss from events like fire, theft, or natural disasters. A home warranty, however, provides coverage for appliances and systems that fail and are excluded from homeowners insurance or another warranty.

What does a home warranty cover?


Usual home warranty coverage is extended to the essential systems and appliances throughout the house. You will want to do some research as coverages and limits can vary significantly between home warranty providers. Generally, however, a home warranty covers the components that are necessary for the proper operation of home appliances and systems. It’s common practice for home warranty companies to separate home warranty plans by systems and appliances. As an example, you might come across system-only plans or appliance plans that are very limited in their scope. Many home warranty companies will also offer a combination option that will cover both systems and appliances.

Many warranty agreements offer add-on options that will include additional coverages. Things that might be added on include swimming pools and spas, septic tanks and plumbing, or some secondary appliances. Also, while roofs are typically covered under an insurance plan, some home warranty options will allow you to add limited coverages for residential roofing. This will not cover roof replacements by a residential roofing contractor. It will usually provide some coverage for roof leaks and other issues that might need to be repaired, however. It’s important to note that your home warranty will only cover the items specifically mentioned in the contract.

Purchasing a home warranty.

No matter the type, size, condition, or age of your home, you can purchase a home warranty at any time for your house. More often, however, home warranties are purchased as part of a real estate deal either as an incentive or for peace of mind. Again, though, the most important part of purchasing a home warranty is research. As an example, you will want to look for home warranty companies in GA to see what is offered in your area and what coverages are available.

According to the Consumer Affairs, the average price of a 12 month home warranty ranges from $300 to $600. The prices will vary depending on your providers, location, coverages, add-ons, and limits. Most warranties are available for renewal upon the expiration of the yearly term. It will be important to review your coverages as your situation and needs may have changed.

A home warranty is beneficial for securing financial protection against unexpected household appliances and system malfunction. You will need to do some research to determine if a warranty is right for you and what coverages you might need. A home warranty could be the right fit for first-time home buyers, home sellers, or homeowners who are looking for extra financial protection.