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What Does a Home Warranty Cover?

Home warranty coverage can protect you in the event that an important home item fails and save you from paying expensive, out-of-pocket costs. Keep reading to learn more about what’s covered by a home warranty.

Kitchen Stacey Van Berkel

With so many home warranty companies available that claim to offer the most comprehensive coverage, it may be challenging to find the best option for your situation.

If you’re asking yourself, “what does a home warranty cover,” the This Old House Reviews Team will educate you on what you should expect when purchasing a service contract, including coverage, pricing, and limitations.

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 that are necessary for operation.

It’s common for providers to break up their home warranty plans by systems and appliances. For instance, you may find a systems-only plan is sufficient when protecting your air conditioning and electrical system. On the contrary, an appliance plan provides financial assistance for 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

Covered Systems and Appliances

Appliances Systems
Appliances Systems
Refrigerator Air conditioning system
Dishwasher Heating system
Built-in microwave Electrical system
Clothes washer Plumbing system
Clothes dryer Water heater
Oven, stove, and range Garbage disposal
Garage door opener Instant water dispenser
Trash compactor Smoke detectors
Freestanding ice maker Central vacuum
Built-in food center Ceiling fans

Home warranty providers are also known for allowing policyholders to increase their coverage by including optional add-ons to a service contract.

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

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

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?

Not all types of repairs are covered under home warranty coverage. Here are some common equipment malfunctions that are almost always disqualified under home warranty coverage:

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

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 and once that limit is reached, you’ll be required for paying any extra costs.

What Is a Home Warranty?

A home warranty is an annual service contract that covers repairs and replacements on major home systems and appliances, like air conditioning or a refrigerator, that have failed due to normal wear and tear. This type of home appliance insurance protects homeowners from paying too much out of their own pockets and gives them peace of mind if something unexpected were to happen.

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.

Home Warranties vs. Homeowners Insurance

Issue Home Warranty Homeowners Insurance
Issue Home Warranty Homeowners Insurance
Your appliances are damaged due to a surge caused by lightning.
An air conditioning system begins blowing warm air during operation.
A fire breaks out, leaving a few appliances inoperable.
The washer and dryer begin malfunctioning due to age and normal wear and tear.
New Canaan Idea House exterior shot Nat Rea

When Does Home Warranty Coverage Begin?

With most home warranty providers, a 30-day waiting period is required before coverage begins. Some companies, like The Home Service Club, have only a 10-day waiting period before coverage kicks in, and 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 for 12 months and can be renewed after it expires. You may find discounted options are available by purchasing a home warranty in 3- or 5-year intervals.

How Much Do Home Warranties Cost?

The cost of a home warranty contract will depend mainly on the provider and the type of coverage you choose. On average, purchasing a basic package generally starts around $300 a year. For more comprehensive care, you should expect to pay about $600 for a warranty that includes up to $20,000 worth of protection.

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.

Front exterior of the 2018 Idea House in Narragansett, RI Nat Rea

If you’re still not sure which home warranty company is right for you, compare some of the top providers in the industry.

Compare Home Warranty Companies

Provider American Home Shield Choice Home Warranty Select Home Warranty
Provider American Home Shield Choice Home Warranty Select Home Warranty
Get a free quote Visit Site Visit Site Visit Site
Plan options 3 + optional add-ons 2 + optional add-ons 3 + optional add-ons
Max covered items 23 items 30 items 18 items
Monthly premium $40–$58 $36–$44 $36–$38
Deductible $75–$125 $85 $75
Additional benefits ShieldPlatinum™ includes coverage boosts and free roof leak coverage Doesn’t deny coverage based on the age of systems or appliances Gives customers two free months of coverage when they sign up for a plan

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:

Our Top Recommended Provider

American Home Shield is considered the founder of the home warranty industry and provides coverage for 49 states, excluding only Alaska. According to its profile on the Better Business Bureau (BBB), the company was accredited in 1997 and currently boasts a B rating.

The This Old House Reviews Team recommends American Home Shield as the best home warranty coverage provider for its 24-hour access for claims submission, flexible packages, and generous coverage caps.

American Home Shield Plans

Systems and Appliances ShieldSilver™ ShieldGold™ ShieldPlatinum™
Systems and Appliances ShieldSilver™ ShieldGold™ ShieldPlatinum™
Price $49.99/month $49.99/month $59.99/month
Air Conditioning
Heating System
Smoke Detectors
Ceiling Fans
Plumbing and Stoppages
Water Heaters
Water Dispensers
Central Vacuums
Ranges, Ovens, and Cooktops
Clothes Washer
Clothes Dryers
Built-In Microwave
Trash Compactors
Freestanding Ice Maker
Garage Door Opener
Built-In Food Centers
Coverage Boost
Roof Leak Coverage

American Home Shield also offers several add-ons for policyholders to extend their protection for more expensive equipment:

  • Electronic extended warranty
  • Pools and spas
  • Well pump
  • Septic pump
  • Guest Unit up to 750 square feet
To receive a personalized quote from American Home Shield, fill out this online form, or call 844-529-9298.

Frequently Asked Questions about Home Warranty Coverage

What does a $500 home warranty cover?

An annual service contract for $500 will typically cover basic systems like air conditioning, electrical, and plumbing, and important appliances like your refrigerator, dishwasher, washer, and dryer. You may also be able to include optional coverage for a pool or hot tub with a $500 home warranty.

What is covered under a home warranty?

Typically, the crucial components that are necessary for the operation of a system or appliance are covered. The provider’s sample contract will give an in-depth overview of the specific part inclusions and limitations.

What’s the difference between a home warranty and a manufacturer’s warranty?

Generally, a manufacturer will include a limited-time guarantee on its systems or appliances as an incentive to purchase its products. This warranty covers both parts and labor for repairs for a specific period. It’s common for these enhanced guarantees to come with an additional fee and may not be as effective as the limited warranty that is sold with the equipment.

Home warranty coverage won’t disqualify systems or appliances based on age or brand name. Rather than focus the guarantee on only a specific piece of equipment, a reputable home warranty provider offers full-home protection in an affordable, comprehensive bundle. In most cases, home warranty coverage will not include equipment with a manufacturer’s guarantee as covered items, until the warranty expires.

How do I make a home warranty claim?

In most cases, a home warranty provider allows for claim submissions 24 hours a day, seven days a week, 365 days per year. Most companies accept claims via email, a direct phone line, or through an account center per its website.

Are home warranties worth the money?

Home warranty coverage is a way of protecting your budget by foreseeing the financial costs associated with inevitable breakdowns on systems and appliances. A home warranty may be a good option for first-time home buyers, people who are selling a home, or homeowners who just want a bit more protection on their systems and appliances.

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