What is a Home Warranty? (And Why You Should Consider Getting One)

Homeownership can come with many costs in addition to your monthly mortgage payment and utilities. Maintenance is one of them. If you don’t want to have to worry about footing the bill for a big, unexpected repair, one of the things you can do is get a home warranty.

If you’ve never heard of a home warranty before, keep reading. We’ll explain to you what this warranty is, how it works, and how you may be able to save money on some of the biggest costs of owning a home.

Armed with this knowledge, you should have a better idea of whether or not getting a home warranty might be something to consider in the future.

What is a home warranty?

Put simply, a home warranty is an annual service contract. It protects your home’s systems and appliances in the event that they break down. Whether you just need a repair or a full replacement, a warranty should cover the cost of the parts, meaning that your bill will be significantly smaller than it would be otherwise.

How does a home warranty work?

If you have a home warranty, the first thing that you should do when something breaks is call the company. Typically, one of their representatives will be able to tell you whether or not the repair is covered under your specific warranty.

If the repair is covered, the warranty company will help you schedule a service call with a pre-screened professional. The professional will then come out to your house and make the repair or replacement as needed. In return, all you will have to do is pay for the service call. The home warranty will cover the cost of any replacement parts.

What types of repairs are usually covered by a home warranty?

It’s important to note that every warranty company is different, so their coverage will be different as well. However, that said, most home warranties will cover the home’s systems and all your major appliances, including:

Appliances

• Refrigerator
• Dishwasher
• Stove (Gas or electric)
• Microwave
• Clothes’ washer
• Clothes’ dryer
• Garage door opener
• Trash compactor

Systems

• Heating system and duct work
• Air conditioning system and duct work
• Plumbing
• Water heater
• Garbage disposal
• Smoke detectors
• Central vacuum
• Ceiling fans
• Doorbell

In addition, many home warranties also offer the option for you to add on additional services for things like septic pumps, well pumps, or pool equipment. Meanwhile, others give you the option to extend coverage to a separate guest house or in-law suite.

If you have specific questions about what the warranty covers, your best bet is to call a home warranty company and to ask to speak to a representative. They will be able to tell you about the specific coverage limits of their policies and any optional, add-on services that they offer.

What’s not covered under a home warranty?

Just like it’s important to know what’s covered under a home warranty, it’s also important to have a realistic idea of what’s not covered. With that in mind, we’ve listed out some things that aren’t typically covered below.

• Roof leaks
• Damage to your windows
• Cracks or leaks in the home’s walls
• Damage to the home’s doors
• Garage doors

Remember, it’s always important to read the fine print in order to see what’s included in your policy. If you decide to go this route and get a warranty, don’t hesitate to ask questions until you’re sure that you know exactly what’s covered.

How will I be charged?

Rather than working like an insurance premium, a home warranty fee is usually billed on an annual basis. The fee generally ends up being a couple hundred dollars. However, the exact amount that you can expect to pay will depend largely on what services are included in your warranty and if you decided to add on any additional coverage.

Notably, many first-time home buyers also get this service for free for the first year that they own their home. It’s common practice for a seller to give a home warranty to the buyer at closing. However, real estate agents can also give a home warranty as a gift to their clients.

Is a home warranty right for me?

Ultimately, as the homeowner, you’re the only one who can decide whether or not a home warranty is right for you. However, if your home systems and appliances are older, it may be worth investigating. While this is an extra annual cost, it can save you from having to worry about an unexpected maintenance expense cropping up at the worst possible time.

Additionally, if you’re thinking of selling your home in the near future, you may want to think about getting one of these for the future buyer. Often, advertising one can be an added bonus for your listing in a competitive market.