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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.
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
Covered Systems and Appliances
Air conditioning system
Oven, stove, and range
Garage door opener
Instant water dispenser
Freestanding ice maker
Built-in food center
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
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
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:
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.
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.
Home Warranties vs. Homeowners Insurance
A lightning surge damages your appliances
An air conditioning system begins blowing warm air during operation.
A fire breaks out, leaving a few appliances inoperable.
The washer and dryer malfunctions due to age and normal wear and tear.
When Does Home Warranty Coverage Begin?
Most home warranty providers require a 30-day waiting period before coverage begins. Some companies, such asThe 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.
Up to $200 off when you sign up for an annual plan
ShieldPlatinum™ includes coverage boosts and free roof leak coverage
Gives customers two free months of coverage when you sign up for an annual 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:
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.
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.
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.
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.
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.
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.
Our Rating Methodology
The This Old House Reviews Team backs up our home warranty ratings and recommendations with a detailed rating methodology to objectively score each provider. We conduct research by speaking with company representatives, requesting quotes, analyzing sample contracts from each company, and conducting focus groups and consumer surveys. We then score each provider against our review standards for coverage, value, trustworthiness and transparency, availability, and customer service to arrive at a final score out of 100.