Buying a home is a big deal, most consider it the most important financial decision you’ll make in your lifetime. So, wouldn’t you do everything you need to in order to protect it? We don’t just mean getting homeowners insurance. Homeowners insurance can protect your home, but it is typically limited to what it can cover—mainly the structure, outbuildings, and select belongings—and when. Homeowners insurance restricts claims to select events, offering to repair or replace items when damaged or lost only under certain circumstances. Outside of those, you can be on your own if your appliance or systems break down due to failure or general wear and tear.

Your Solution? A Home Warranty.

A home warranty is similar to a homeowners insurance policy in that it provides protection for covered items within your home. However, outside of that, they vary greatly. Home warranty contracts are usually only for a year of coverage at a time and they target their protection to home appliances and major home systems. Home warranties allow for the repair or replacement of these items with minimal out of pocket expense to you.

What Is Included In A Home Warranty?

This can vary from provider to provider, but the general list of components covered include:

  • HVAC (Heating Ventilation Air Conditioning) System
  • Ductwork
  • Electrical & Plumbing
  • Water Heater
  • Dishwasher, Fridge, Oven/Range
  • Washer & Dryer
  • Garbage Disposal

Be sure to review your home warranty plan in full prior to enrolling to ensure it covers all of the items you need it to. Some policies may not cover all of the above or may include more than the listed items. In addition, there may be caps in your coverage benefits—so, if you have a particularly expensive appliance or need an expensive repair, your home warranty may restrict payout based on your warranty limits.

How Home Warranties Work

When you first buy a home, you may receive advertisements in the mail to purchase a home warranty. Your seller, real estate agent, or mortgage lender may also purchase a home warranty for your first year in your new home as an added bonus for working with them. However you get a policy, the process for filing a claim and receiving your benefits is relatively simple and the same for most plans.

  1. Your home appliance or system breaks down. Before calling around for repair quotes, contact your home warranty provider.
  2. Your warranty provider will collect information about your repair issues and will selected a licensed repair company from their network of approved providers.
  3. The selected repair company will reach out and schedule an appointment—most do within 24 hours.
  4. The repair or replacement of your appliance or system is conducted.
  5. You are only responsible for your deductible; your home warranty takes care of the rest. Under most home warranties, this is $75 to $100.

Annual Home Inspection

Before your home warranty expires, it is a good idea to enlist the help of a home inspector to conduct an annual home review or annual home inspection. This type of inspection will review the key components of your home—the same items and systems covered in your home warranty. The benefit of this type of review is the opportunity to identify parts of your home that may need attention before your home warranty expires.