Home Warranty vs Home Insurance
What’s the difference between a home warranty and homeowners insurance? Find out here, compare contracts, and learn why homeowners should…
What Do Home Warranties Cover? (2023 Homeowner’s Guide)
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When a major system or appliance breaks down in your home, you could be stuck paying exorbitant repair costs—unless you have home warranty coverage. Below, we’ll discuss what’s commonly covered under a home warranty, how one works, and how to choose the best home warranty policy for you and your home.
Below are our top recommended home warranty providers. Click below to get a free, no-obligation quote.
What Does a Home Warranty Cover?
A home warranty, also known as a home protection plan, typically covers major systems and appliances in your home, like your HVAC system, plumbing, refrigerator, or garbage disposal.
The exact parts and components covered per item tend to vary between providers, though the vast majority include features necessary for the appliance or system to properly function. You’ll still want to read through any company’s inclusions and exclusions carefully before committing to a contract.
Here’s what is most commonly covered by a home warranty, and how that can vary across standard plan options:
| Item | Basic Home Warranty Plan Levels | Premium/Comprehensive Home Warranty Plan Levels |
| Refrigerator | ||
| Built-in microwave | ||
| Refrigerator | ||
| Oven/stove/range | ||
| Trash compactor | ||
| Freestanding ice maker | ||
| Built-in food center | ||
| Clothes washer | ||
| Clothes dryer | ||
| Garage door opener | ||
| Air conditioning system | ||
| Heating system | ||
| Ductwork | ||
| Central vacuum | ||
| Ceiling and attic fans | ||
| Electrical system | ||
| Plumbing system | ||
| Plumbing stoppages | ||
| Garbage disposal | ||
| Hot water heater | ||
| Instant hot/cold water dispenser | ||
| Doorbell |
Appliance Coverage vs. System Coverage
Most companies offer two to four coverage options—an appliance plan, systems plan, combo plan, and build-your-own plan—for customers.
An appliance-only plan covers all major appliances in the home and is the best home warranty option for those who have old home appliances and relatively new systems already covered under an extended warranty. A systems-only plan covers all major systems in the home and is the best type of home warranty for those who have old home systems but fairly new appliances that are still covered under a manufacturer’s warranty.
Below is what coverage looks like under these different plans.
Appliance Plan
- Refrigerator
- Dishwasher
- Built-in microwave
- Clothes washer
- Clothes dryer
- Oven/Stove/Range
- Garage door opener
- Trash compactor
- Freestanding ice maker
- Built-in food center
Systems Plan
- Air conditioning system
- Heating system
- Electrical system
- Plumbing system
- Ductwork
- Water heater
- Garbage disposal
- Instant water dispenser
- Smoke detectors
- Telephone wiring
- Central vacuum
- Ceiling fans
- Doorbell
In addition to these types of home warranty plans, some companies will also provide a basic plan or combination plan. A basic plan will cover general home items, like the refrigerator and electrical systems, while a combination plan will offer slightly more comprehensive coverage and protect all major systems and appliances, including your air conditioning systems, washer and dryer, and water heater.
Note: Certain appliances may not be covered depending on where you live and the coverage you have. Make sure you read your sample contract thoroughly to know what is and isn’t covered under your policy.
Home Warranty Optional Add-ons
The best home warranty providers allow customers to customize their plans and add on protection for certain items at an additional cost. Some of the more popular add-ons are listed below:
- Pool and spa equipment
- Hot tub
- Well pump
- Septic pump
- Standalone freezer
- Additional appliances, like a second refrigerator or second microwave
- Roof leaks
- Pre-season HVAC tune-up
- Pest control services
- Guest unit
- Electronics
Which Company Has the Best Home Warranty Coverage?
There are a variety of home warranty companies that provide different levels of coverage at different prices. Here are some of the best home warranty providers in the business.
Superlative
Star Rating
Monthly Cost
Service Fee
Response Time
Payout Limit (per item)
States Not Covered
What’s Not Covered Under a Home Warranty
Understanding what is covered by a home warranty is as important as understanding what is not covered. Many homeowners get frustrated when they file a claim, and the claim gets denied. Although this is unfortunate, it usually comes from a lack of understanding of the policy.
While item-specific exclusions vary widely from provider to provider, here are some general issues that are almost always ineligible for coverage through a home warranty:
Scenarios That Don’t Qualify for Home Warranty Coverage
- Pre-existing conditions
- Improper installations
- Poor routine maintenance
- Misuse of a covered appliance or system
- Cosmetic damages (dents, scratches, dings, etc.)
- Damage caused by pests, vermin, or household pets
- Secondary damage (wood rot due to a pipe leak, burn marks due to a failed electrical outlet, etc.)
- Damage caused by natural disasters (hurricanes, fires, lightning, etc.) or any other coverages that overlap with standard home insurance
- Remediation of mold, mildew, rust, corrosion, or other bio-organic growth
Limits and Exclusions on Home Warranty Coverage
Sometimes, home warranties will have limits on systems set at a dollar amount. For example, a home warranty company may cover a repair on your dishwasher up to $500, leaving you to pay for the remaining repair expenses. Your contract will stipulate how much your warranty company will pay for repairs and replacements and if there’s a cap on how much they will pay.
Additionally, your service contract could include exclusions for systems or appliances that fail due to improper maintenance. Home warranty companies will pay only for repairs and replacements that happen due to normal wear and tear. As long as the system or appliance in question has received continuous maintenance and was in working order when the house was bought, your home warranty should cover the repair or replacement.
Before signing a home warranty contract, make sure that you understand what is and isn’t covered. Some repairs may not be made or paid for if there is evidence of improper maintenance, code violations, unusual wear and tear, or improper installation.
Ask your real estate agent about getting a home inspection before purchasing a warranty to determine any pre-existing conditions that a system or appliance might have. These “known conditions” could be included as an exclusion in your contract, so it’s a good idea to address these issues before securing a home warranty.
Remember: Certain appliances may not be covered depending on where you live and the coverage you have. Make sure you read your service contract thoroughly to know what is and isn’t covered under your policy.
Final Thoughts
Before purchasing a home warranty, do your research and check out consumer reviews and third-party sites to compare plans and get a sense of customer satisfaction, pricing, limitations, exclusions, home warranty features, and more. At House Method, we pride ourselves on delivering the utmost trust and transparency to our readers. That’s why we took the time to create an objective rating system and score each home warranty provider according to that methodology.
Whenever you read our home warranty reviews, you can rest assured that the information put forth is straight from customer service representatives at the home warranty company and that the overall home warranty rating is based on an unbiased weighted, 100-point scale that scores companies on plans offered, coverage, state availability, cost, trustworthiness, customer service, and unique benefits.
Frequently Asked Questions About Home Warranty Coverage
Who needs home warranty coverage?
A home warranty can benefit just about anyone, from first-time homeowners and home sellers to real estate agents and rental property owners.
What’s the difference between a home warranty and homeowners insurance?
Unlike homeowners insurance, which covers property damage from natural disasters and burglaries and protects you if someone gets injured on your property, a home warranty will cover most major components of large home systems and appliances that break down due to normal wear and tear. Additionally, homeowners insurance is usually required by your mortgage lender whereas a home warranty is optional.
How much does a home warranty cost?
The average home warranty cost is between $25–$67 a month, however you might be able to save more money by enrolling in a multi-year plan. In addition to paying a monthly premium, you’ll typically have to pay a service fee, or deductible, of $75–$125 for every service visit.
How can I request service?
Most home warranty companies allow you to file a claim online or by calling a customer service number.
How does a home warranty work?
After requesting service for your covered items, your home warranty provider will put you in contact with a licensed, approved technician or let you choose your own contractor for repairs. The contractor will come out to your house, at which time you’ll pay them a service fee. After diagnosing the issue, the contractor will recommend a repair or replacement.
In most cases, the repair can be done that same day. If a replacement is needed, you might have to schedule a follow-up appointment for the contractor to come back and install the new appliance or system.
When do I buy a home warranty?
Most people choose to buy a home warranty when they’re buying their first home, but in reality, you can opt into protection at any time during homeownership. If you’re selling a home, you may want to buy a home warranty to make your home more attractive to buyers.
How long does a home warranty last?
Most home warranties will last for 12 months and may be renewed annually.
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