Am I Covered? Here’s What’s Included in a Home Warranty

Homeownership is a milestone for many, but it’s also unpredictable. Stuff happens, pipes burst, dishwashers leak. A home warranty can help you prepare for the worst by ensuring the worst never actually happens. It’ll help ease the financial burden of replacements and repairs so you can get the work done before there’s a more significant issue. So, what’s included in a home warranty? Here’s what you need to know.

What Is a Home Warranty Plan?

You’re probably not familiar with home warranties as a first-time buyer. A home warranty is a service contract that helps cover the cost of repairs or replacements for significant home systems and appliances. It’s similar to homeowners insurance, but how it helps differs. 

Both homeowners insurance and home warranties act as a one-two punch. Home insurance helps cover the damage from a faulty system, like fire damage or water damage. A home warranty will help cover repairing or replacing the defective system itself. For example, maybe a pipe burst and flooded your kitchen, which ruined the laminate floors. Your homeowners insurance would help cover the cost to replace the laminate, while your home warranty would help cover the cost to replace or repair the pipe.

Types of Home Warranty Plans

There are a handful of major home warranty companies, including American Home Shield, Choice Home Warranty, and Landmark Home Warranty. You might also find some local home warranty companies while researching. Regardless, they all tend to offer the same types of warranties:

• Appliance warranties: Cover select appliances like your fridge or oven

• Systems warranties: Cover systems like your ductwork or plumbing

• Combination or hybrid warranties: Cover both appliances and systems

Home warranties typically come with a monthly or yearly fee for the policy, plus a service call fee should you need repairs or replacements. A combination policy usually comes with lower premiums than a group of individual policies.

What’s Included in a Home Warranty?

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When selecting home warranty coverage, make sure it covers all the appliances you need. Each plan varies, and you might need to add on coverage for finicky or high-cost appliances like jetted tubs, which are prone to breaking down. Home warranty companies offer different tiers of coverage.

Basic Home Warranty Coverage

Depending on the type of warranty, basic systems coverage may include:

• HVAC systems (including central heating, air conditioning, and ductwork)

• Electrical systems

• Plumbing

• Ceiling fans 

• Water heaters

• Re-keying

• Garage door openers 

• Doorbells

• Home security systems

Basic appliance coverage from your home warranty company may include appliances like:

• Garbage disposals

• Refrigerators and freezers

• Ranges, ovens, and cooktops

• Clothes washers and dryers

• Dishwashers

• Built-in microwaves

• Built-in water and ice dispensers

• Toilets

Additional Home Warranty Coverage

A basic plan won’t cover everything. For example, your refrigerator warranty may not cover the extra fridge you have in the basement or your plumbing warranty may not cover the actual fixture or faucet. In this case, you can opt for enhanced coverage or add-ons. Some additions include:

• Spas and jetted tubs

• Swimming pools

• Well pumps, sump pumps, or drainage systems

• Septic systems

• Sprinkler systems

• Whole-house humidifiers

• Faucets and plumbing fixtures

• Wine refrigerators

• Electronics like TVs, laptops, smart home products, and video game consoles

• Additional fridges, freezers, ovens, or air conditioners

• Roof leaks

• Exterior plumbing 

• Guest homes

What Doesn’t a Home Warranty Cover?

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Home warranties have coverage limitations, which are sometimes difficult to understand. For example, your garage door opener might have coverage, but that coverage probably won’t extend to the garage door or track mechanics. Similarly, your plumbing may have coverage, but that coverage doesn’t extend to pipes outside the walls of your home. Policies tend to vary between new and existing homes, and many home warranty companies don’t offer policies that include:

• Roof leaks

• Solar panels

• Commercial-grade appliances and systems

• Problems stemming from rust and corrosion

• Asbestos, mold, and radon mitigation

• Nonessential elements of systems and appliances (like your TV remote or oven rack)

• Normal or pre-existing wear and tear

Even if your policy does cover a certain system or appliance, there are usually monetary limits. For example, you might have a $500 cap on replacing a dishwasher and a $1,000 cap for ductwork repairs. You’ll also probably have a maximum limit per period, like $5,000 per item per year or a $15,000 annual cap on all claims. Some things may void your warranty, like:

• DIY repairs and installations 

• Skipping regular maintenance

• If the system was previously flagged by a home inspector

• If the repair or replacement is used to correct a building or zoning violation

Just like homeowners insurance, it’s important to read the fine print before you take out a plan—and there’s likely a lot of it. Is a home warranty worth it? Research the top-rated home warranty companies near you in your area and weigh the pros and cons.