What Is a Home Warranty?
A Home Warranty is a service contract, between a homeowner and a home warranty company that provides for discounted repair and replacement service on a home's major components, normally for one year. The Home Warranty helps protect home owners against the cost of unexpected covered repairs or replacement on their major systems and appliances that break down due to normal wear and tear. Coverage is for systems and appliances, in good working order, at the start of the home warranty contract.
A home warranty is not the same thing as homeowners insurance, nor is it a replacement for homeowners insurance. Homeowners insurance covers major perils such as fires, hail, property crimes and certain types of water damage that could affect the entire structure and/or the homeowner's personal possessions. A home warranty does not cover these perils. Rather, it covers specific components of the home.
Home warranty companies have agreements with approved service providers. When something that is covered by a home warranty breaks down, the homeowner calls the home warranty company, and the home warranty company sends one of its service providers to examine the problem. If the provider determines that the needed repair or replacement is covered by the warranty, they completes the work. The homeowner only pays a small service fee, plus the money that has already spent to purchase the warranty.
What's Covered?
Check your home warranty policy to see which of the following items are covered.
Also find out if the policy covers the full replacement cost of an item or just partial/repair.
- Plumbing
- Electrical systems
- Furnace
- Water Heater
- Heating Ducts
- Water Pump
- Dishwasher
- Garbage Disposal
- Stove/Cooktop/Ovens
- Microwave
- Refrigerator
- Washer/Dryer
- Swimming Pool (may be optional)