Most homeowners don’t know what a home warranty is. In fact, many people confuse home warranties with home insurance. While both are important, they offer different protections for your home. In this article, we’ll discuss what a home warranty is, what it covers, and how it differs from home insurance.
What Is a Home Warranty?
A home warranty is a service contract that helps homeowners cover the costs of repairs or replacements for major home systems and appliances. Warranties are offered by companies specializing in home warranties, and they can be purchased for an annual fee. Homeowners can purchase a warranty at any time, but most people do it when they first buy their home or when they’re selling it.
There are two types of home warranties:
- Appliance warranties: These cover the repair or replacement of major appliances, like your refrigerator, oven, dishwasher, washer, and dryer.
- Systems warranties: These cover the repair or replacement of major systems in your home, like your heating and cooling system, plumbing, ductwork, and electrical system.
Most home warranty companies offer a basic plan that covers both appliances and systems. Some also provide an upgraded or premium warranty plan that covers additional items, like your swimming pool, septic system, well, or entertainment system.
A home warranty is an annual service contract that covers repairs and replacements on major house systems and appliances, such as air conditioning or a refrigerator, that have broken down due to normal use. This form of home appliance insurance protects homeowners against paying too much out of their own pocket and provides them peace of mind if something unexpected were to occur.
Homeowners insurance is the most common type of property coverage in the United States. It protects your house and personal belongings against damage caused by theft, fire, weather, and liability claims. Home warranties also protect your home investment but in a different way. If your AC system breaks and leaks, your homeowners’ insurance should cover the water damage but not the repairs. On the other hand, a home warranty will generally cover the AC system repair costs but not the damage it causes. So, to put it simply, a home warranty and homeowner insurance complement each other, providing more comprehensive protection than each can offer on its own.
Home Warranty vs. Manufacturer Warranty
A manufacturer will typically offer a limited-time guarantee on its equipment or appliances as an incentive to buy its goods. This warranty covers both parts and labor for repairs for a preset time. An extended warranty, which usually incurs extra charges, isn’t always as effective as the original warranty that comes with the equipment.
A home warranty is a service contract that you pay for, usually annually. It helps cover the costs of repairs or replacements on major systems and appliances in your home that break down due to normal wear and tear. You can buy a home warranty at any time, but most people do it when they first purchase their home or when they’re selling it.
While manufacturer warranties and home warranties both offer protection, there are some key differences between the two:
- A manufacturer warranty is included with the product at no extra cost and only lasts for a limited time, while a home warranty is an annual service contract that you have to pay for.
- A manufacturer warranty covers defects in materials or workmanship, while a home warranty covers repairs or replacements due to normal wear and tear.
- A manufacturer warranty usually only covers the product itself, while a home warranty often covers additional items like your pool, septic system, or electrical system.
- A manufacturer’s warranty typically doesn’t cover labor costs, while a home warranty usually does.
- A home warranty will not take into consideration the age of the equipment or system that’s being covered.
What Does a Home Warranty Cover?
Professional home warranty companies offer a basic plan that covers both appliances and systems. Some also provide an upgraded or premium plan covering additional items, like your swimming pool, septic system, well pumps, HVAC, or roof leaks.
Here are some of the most common things in a typical home warranty coverage:
- Appliances: These include your refrigerator, oven, dishwasher, washer, dryer, range, stove, oven, etc.
- Systems: These include your heating and cooling system, plumbing, septic system, ductwork, electrical system, ceiling and exhaust fans, smoke detectors/fire alarms, and garage door openers, among others.
- Other common items: These include your swimming pool (pump only), sewer line backup valve, well (pump only), central vacuum system, and more.
As you can see, a home warranty can cover many different things in your home. But it’s important to remember that every home warranty company is different, so be sure to read the fine print before purchasing a policy.
What Doesn’t A Home Warranty Cover?
Like anything else, there are some limitations to enter in a home warranty coverage. For example, most home warranties will not cover damage caused by negligence, abuse, improper installation, or lack of maintenance. Additionally, many home warranties also exclude pre-existing conditions.
Other warranty limitations include:
- Any structural issues, walls, foundations, flooring, etc.
- Any issues related to corrosion, rust, or sediment
- Solar systems and affiliated components (these are considered part of the home’s structure)
- Any previous repairs that are outside of the home warranty contract
- Any nonessential components not required by the covered item to function (oven racks, remote controls, clocks, timers, etc.)
- Any services used to correct building and zoning code violations
- The detection, identification, and removal of any hazardous substances (mold, asbestos, radon gas, etc.)
Choosing the finest home warranty provider for your house might be a difficult task, especially if there are so many different types of plans available. First Premier Home Warranty is here to assist you in selecting the best plan for your requirements. We provide free online quotes to help you decide what would be ideal for your property and budget. Visit our website immediately to discover what choices you have!