What Is Home Warranty Coverage?

By Alex Hawkins | November 30, 2023

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Homeownership comes with many responsibilities — one of them being system and appliance maintenance. Unless you enjoy do-it-yourself home projects, you’ll need to find a technician to make any necessary repairs when your HVAC system or dishwasher breaks down.

With a quality home warranty plan from one of the best home warranty companies, you get peace of mind that your covered appliances and systems will be taken care of if they break down from normal wear and tear. Home warranty plans give you the ability to plan financially for a repair or replacement and provide the convenience of connecting you with a vetted technician.


What Does a Home Warranty Do?

A home warranty plan covers the expensive and usually unexpected repair or replacement costs of home systems and major appliances when they break down due to normal wear and tear. You typically sign a one-year contract, although some providers offer multiyear plans. You pay a monthly fee—or premium—for coverage, and then submit a claim to request service when a covered item breaks down. The home warranty provider will cover the cost according to your plan terms. It will also typically connect you with a vetted service technician to complete the repair.


What Does a Home Warranty Cover?

A home warranty covers the essential systems and major appliances in your home. While exact terms of coverage vary across providers and specific plans, a home warranty typically covers the components of a covered item that are necessary for operation. However, damage from lack of regular maintenance isn’t usually covered.

Home warranty companies generally offer plans that protect systems, appliances, or a combination of the two. For example, if you choose an appliance-only plan, you’ll only have coverage for items within that category, such as your dishwasher and stove. A systems-only plan would likely cover your HVAC, plumbing, electrical, and similar essential home systems. You also may find options for coverage plans that combine appliance and systems coverage into a single plan. Smaller items such as faucets and exhaust fans may be found in some of the more comprehensive plans.

What Major Appliances Are Typically Covered?

Most providers offer a basic plan that covers the laundry and kitchen appliances in your home, plus a few other major appliances. Below are the most common home appliances covered by a home warranty plan:

What Home Systems Are Typically Covered?

Systems are essential to your home’s function and comfort. Most providers protect all the major systems in your home, including the HVAC and water heater. Below are home systems that typically receive coverage in a comprehensive home warranty policy:

What Are Optional Add-Ons?

Many providers allow customers to supplement their home protection plan by purchasing optional add-ons. These items go beyond the core home systems and appliances. Below are some common add-ons offered by many home warranty companies:


What Doesn’t a Home Warranty Cover?

It’s common for there to be a delay in coverage once you purchase a plan. This is known as the waiting period and usually lasts 30 days. 

Additionally, home warranty plans cover breakdowns from normal wear and tear, but typically list exclusions for preexisting conditions or issues that develop from lack of basic maintenance. Below are a few common exclusions included in most home warranty contracts:

To learn the specific coverage limits and exclusions of a provider you’re interested in, you can look on the provider’s website for a sample contract or call a representative. 


How Do I Use My Home Warranty Coverage?

After you’ve purchased home warranty coverage and passed the waiting period (if any), you can file a claim any time a covered item breaks down. The process of filing a home warranty claim generally follows these steps:

  1. When a covered item breaks down, you can typically file a claim using an online form or by calling your provider. A few providers also have a mobile app.
  2. Your provider will process your claim, which typically takes 24 to 48 hours. Some providers offer emergency services, and each provider will specify its response time frame so you know what to expect.
  3. After your request is processed, the company will schedule a technician to address the breakdown. At this time, you’ll pay a service call fee, which is essentially a small deductible you pay for each claim. The amount should be outlined in your policy and is usually between $75 and $125.
  4. The service provider will evaluate the problem and schedule a repair or replacement as needed. If it’s a simple repair, the technician may be able to resolve it at this first visit.
  5. Most providers offer a workmanship guarantee after your repair is complete. This promises that the company will send a technician out again if the repaired home system or appliance breaks down again within a set time frame. Each company’s guarantee will list specifics, so make sure you read the details carefully to understand the terms.


Is a Home Warranty the Same as a Homeowners Insurance Policy?

A home warranty is not the same as a homeowners insurance policy. Although they sound similar, a home warranty protects appliances and systems that break down due to normal wear and tear. In contrast, homeowners insurance protects you financially from various perils, such as fire, theft, lightning strike, and similarly damaging events. 

Additionally, most homeowners insurance policies come with liability insurance that protects homeowners from having to pay for the medical expenses of someone who’s injured on their property. For example, if someone trips and injures themselves walking up your front steps, homeowners insurance will cover their medical bills up to a predetermined amount.

It’s also important to note that, unlike insurance companies, home warranties don’t have to be licensed by the National Association of Insurance Commissioners and the Federal Insurance Office. Instead, most home warranty providers are regulated on a state-by-state basis. 


Our Recommendation

While home warranty coverage is a quality investment, a plan may not be right for everyone. For example, if you just purchased a new home with systems and appliances covered under a manufacturer’s warranty, you should wait until that coverage expires. Additionally, if you have a large emergency savings account, it may not be worth it to pay monthly for coverage.

For most homeowners, though, a home warranty can bring peace of mind that essential systems and appliances are financially protected. This coverage is particularly helpful for homeowners who have limited knowledge of service technicians in their area, as many plans connect policyholders with vetted local contractors. Home buyers may also view a transferable warranty as a bonus if you’re trying to sell your home and want to add an incentive.

If you’re interested in home warranty coverage, we recommend checking out American Home Shield. American Home Shield offers comprehensive coverage options and has years of experience helping homeowners protect their systems and appliances. We recommend requesting free quotes from at least three providers and comparing the quotes for the best coverage fit for your home.


Frequently Asked Questions About Home Warranty Coverage

Who does a home warranty protect?

A home warranty protects the homeowner from the cost of some repairs for essential home systems and appliances. Home warranty coverage typically only applies to breakdowns due to normal wear and tear. Some commonly covered items include your refrigerator, dishwasher, air conditioner, heating system, and oven.

What is the duration of home warranty coverage?

Most home warranties offer one-year plans. However, some providers offer homeowners the option of enrolling in multiyear service contracts for a discounted rate.

Can a home warranty company cancel my coverage?

A home warranty company can’t cancel your coverage. However, many providers allow you to cancel coverage within a set period of time, typically 30 days.


How We Chose the Top Home Warranty Providers

Our team reviewed and researched dozens of home warranty providers, thoroughly analyzed sample agreements, and identified customer pain points based on customer-review analysis and interviews with industry experts. Our in-depth methodology guides our review process to provide transparent information about the companies we review.

During this process, we determined that the most critical aspects of a home warranty company include available service plans and add-ons, depth of coverage, plan cost, industry reputation, customer support infrastructure, and additional features. We also focused on the ability to choose your own contractor; upgrade your coverage package; transfer your plan to another owner; and cover roof leaks, high-end appliance brands, ceiling and exhaust fans, and faucets and fixtures.

Our research supported that plan coverage should carry the most weight, with customer support as the second-most important factor. Industry reputation, plan availability, and additional features were rated equally. Therefore, we determined that price range, while worth considering, should not be the primary basis for choosing a home warranty provider for your home’s needs.