Knowing what your home warranty covers can help you choose the best possible plan for your home repair needs. But what exactly does the typical home warranty plan cover?
While specifics may vary depending on the company and plan you choose, most policies generally cover major systems such as plumbing, electrical wiring, heating and cooling, and appliances such as refrigerators and washing machines.
Home warranty companies have a long list of terms, limitations and exclusions that you should consider. Read on for information about what’s typically covered, common exclusions, and other important details to help you better understand your home warranty coverage.
What is a home warranty?
A home warranty is a service contract that covers the cost of repairing or replacing major home systems and appliances if they fail or malfunction due to normal wear and tear. The contract typically includes an annual or monthly fee and a service call fee (or deductible).
Home warranty coverage is not homeowners insurance, which pays for damage to your home and personal belongings resulting from covered incidents such as storms, fires and vandalism. Home warranties, unlike homeowners insurance, are not required by mortgage lenders.
Warranty plans are largely purchased through home warranty providers like American Home Shield or Select Home Warranty that offer multiple coverage options. Check out our list of the best home warranty companies to get a breakdown of each.
What does the home warranty cover?
Home warranties cover major appliances and systems, as long as they are not covered by the manufacturer’s warranty. While coverage depends on your specific policy, home warranties typically include:
Home systems
- Electrical systems (internal wiring)
- Plumbing, including breaks
- Cooling and heating systems such as air conditioners and ductwork
- HVAC systems
- Water heater
- Garage door opener
- Waste compactor
Home appliances
- Kitchen refrigerators
- Dishwasher
- Built-in microwave ovens
- Hobs, ovens or cookers
- Garbage disposal
- Ceiling or exhaust fans
- Washing machines and dryers
Additional components
In addition to the items listed above, most home warranty companies offer optional coverage for the following:
- Pool and spa equipment
- Well, pumps
- Collection pumps
- Septic systems
- Centralized suction
- Repairing roof leaks
- Independent freezers
- Water softeners
- Ice makers
What doesn’t the home warranty cover?
Home warranty policies typically exclude coverage for pre-existing conditions, maintenance costs and improperly installed appliances. Specific appliances such as window air conditioners or, in some cases, appliances installed after the policy was purchased may also be excluded.
Home warranty companies also set coverage limits on the amount you pay per contract length and covered items. Coverage limits are generally stated in fine print and vary from company to company. For example, some companies pay up to $1,500 per year for HVAC repairs, while companies like American Home Shield cover up to $5,000.
Other items or events that may not be covered:
- Duplicate appliances (such as a second freezer or appliances for a second kitchen)
- Smaller appliances such as a countertop oven
- Components such as knobs, shelves and drawers
- Some appliances without maintenance records (such as an HVAC system)
- Failures caused by lack of maintenance
- Improper installations, repairs or modifications
- Malfunctions due to sediment, rust or corrosion
- Structural features such as floors, windows and doors
- Damage resulting from mold, wood rot or roof leaks
While these coverage exclusions are somewhat standard across the industry, they may vary depending on the service provider.
In fact, companies typically have their own exclusions when it comes to specific parts or components, such as knobs, hinges, thermostats, or handles. Before making a decision, we recommend that you carefully read the contract template and pay particular attention to coverage exclusions and reimbursement limits.
For more information on common denial reasons, see 8 Reasons Your Home Warranty Claim May Be Denied.
When does home warranty coverage start?
Most policies have a waiting period before coverage begins, usually around 30 days. This is usually because the company will not cover pre-existing damage or repairs due to normal wear and tear.
How long is the home warranty coverage for?
A home warranty contract typically lasts one to two years and can go up to three years. If you choose to pay the warranty price all at once, rather than a monthly premium, you will typically receive a discount.
Frequently asked questions about home warranty coverage
Do home warranties cover HVAC?
Yes, most home warranty policies cover HVAC systems. However, companies can only cover these systems if they can demonstrate that they receive regular maintenance, as evidenced by service records.
What does the home warranty cover when purchasing a home?
A home warranty provides coverage for items included in the sale, such as plumbing fixtures, electrical systems, heating and cooling systems, major kitchen appliances, laundry appliances, garbage disposals, doorbells, garage door openers, ceiling fans and central vacuum cleaners.
If a home inspection is performed before the sale, the escrow company may not cover any defects in the property highlighted in the inspection report. This may be considered a pre-existing known issue and therefore would not be covered.
Does the home warranty cover air conditioning?
Yes, home warranty policies generally cover air conditioning systems. However, you may need to show regular maintenance records for repairs to be covered.
What does the home warranty cover?
The specific coverage of home warranties varies from company to company. In general, most policies cover plumbing and electrical systems, heating and cooling systems, major kitchen appliances, laundry appliances, garbage disposals, doorbells, garage door openers, ceiling fans and centralized vacuum cleaners. You may pay an additional fee to cover additional appliances and systems.
Money Summary What does the home warranty cover?
A home warranty can be a great way to protect your investment in your home. While they don’t provide the comprehensive coverage that home insurance offers, these plans can help you pay for otherwise expensive repairs to your most valuable appliances and systems.
However, it is important to understand the terms of the service contract before signing up for coverage. By understanding what a home warranty covers and the potential limitations of your policy, you can make an informed decision about whether that plan or provider is right for you.