Things Covered and Not Covered in a Home Warranty

A home warranty sounds like it is a great form of monetary security against unexpected, expensive home repairs. But you should understand what is covered in a “standard” home service contract. When you are buying a home, there is possibility that you were provided with a home warranty by the seller and you assumed that it will take care of all repairs inside your home. But there are some items NOT covered by your appliance warranty provider.

Basics of home warranty –

What Does Home Warranty Cover?

The best answer to this can be found by evaluating your specific contract or by reviewing an on-line contract sample.

Basic coverage includes:

  1. Plumbing stoppages
  2. Plumbing System
  3. Sump pump (permanently installed)
  4. Toilets
  5. Hot water pump
  6. Bathroom whirlpool motor pump
  7. Water heater
  8. Ceiling fans
  9. Smoke detectors
  10. Built-in dishwasher
  11. Built-in microwave
  12. Attic and exhaust fans
  13. Heating and duct-work
  14. Telephone system
  15. Electrical system
  16. Instant hot water dispenser
  17. Built in trash compactor
  18. Oven
  19. Cook tops
  20. Doorbells
  21. Air conditioning
  22. Garbage disposal
  23. Range and oven
  24. Telephone wiring
  25. Central heating system
  26. Range Hood
  27. Humidifier
  28. Refrigerators (does not include ice maker)

Because coverage differs from policy to policy and from state to state, request to see a sample copy of a policy before you commit.

What is Not Covered in a Standard Plan?

As discussed above, the contract covers only those parts, systems and appliances that are mentioned as covered and excludes all others. Remember you can always pay extra premium to cover these items before you sign the contract.

  1. Faucet repairs (unless otherwise stated in the policy)
  2. Spa or pools (you can request/add this coverage in some cases)
  3. Hot tubs (you can request/add this coverage in some cases)
  4. Not all plans pay for washers and dryers or garage door openers. These come under “Enhanced Coverage”
  5. Outdoor items such as sprinklers
  6. Haul away debris
  7. Hauling away old appliances
  8. Outdoor water systems
  9. Combo ceiling fans
  10. Second air conditioner
  11. Second fridge/freezer
  12. Food spoilage
  13. Icemaker
  14. Well Pump
  15. Central Vacuum
  16. Limited Roof Leak
  17. Septic system
  18. Septic Tank Pumping
  19. Stand Alone Freezer
  20. Home entertainment
  21. Office package
  22. Central AC unit
  23. Wine cooler
  24. Heating system
  25. Septic system
  26. Additional spa
  27. Washing machine

However, for items such as washer/dryer, kitchen refrigerator, air conditioning, spa equipment, pool and roof leak repair, additional or optional coverage are available for an extra fee at the time of contract. Verify your contract to check which optional coverage, if any, were paid for.

Basics of Home Warranty

A home warranty is neither similar nor it is a replacement for homeowners insurance. Homeowners insurance policy covers major unforeseeable events such as fires, theft, property crimes, hail and certain types of water damage that could have an effect on the homeowner’s personal possessions and the entire structure. A home warranty does not cover these hazards but it covers particular components of the home. It covers regular wear and tear defects which may include an older air conditioner break down or requiring certain parts changed in spite of you have kept up with needed maintenance. In simplest terms, a home warranty is an additional coverage for the items in your home which might initially have been covered by a manufacturer’s or builder’s warranty.

When you purchase a home warranty, you are principally signing a service contract. The contract provides for low-priced repair and replacement service on a number of home’s major appliances. Most plans have a basic component that offers all the homeowners who pay for a policy with certain coverages. The contract will spell out which appliances it’ll cover, how much is required to pay per occurrence and what is not covered. For instance, structural aspects of your home are not covered. So if your roof falls down, that would be covered by homeowner’s insurance. In case your water heater leaks, the water heater would be covered but the consequent water damage would be homeowner’s insurance issue. Homeowners are also allowed to procure one or more optional components that give additional coverage at additional cost.

How much does a Home Warranty Cost?

They are quite inexpensive, usually ranging from $259 to $400, based on coverage. Home warranty companies every now and then run special discount policy prices or special sales or provide additional coverage for the same price. The policies are prepaid for a year in advance, at which time they run out or can be renewed.

How Do They Work?

Though specific plans offer for definite types of coverage, most operate in the same way.

  • If a home appliance or a system breaks down, the home owner calls the home warranty firm.
  • The home warranty company calls a service provider with whom it has a business arrangement in order to examine the problem.
  • The provider then calls the home owner to make an appointment.
  • If the provider settles on that the required replacement or repair is covered by the warranty, he accomplishes the work. In case an appliance cannot be repaired and is malfunctioned, based on the contract coverage, the home warranty firm will pay to put back and set up the appliance.
  • The homeowner only pays a small trade service fee (less than $100) plus the money he/she has spent by now to buy the warranty.

Watch this video to know how home warranty works –

Types of Coverage

As all plans differ, you are required to ask specifically what is covered. Inquire with your real estate agent if upgrades are available. Make sure that whether the home warranty company will pay for your repairs to make certain types of appliances or systems compliant with new regulations. Pay close attention and read the home warranty contract cautiously to know the coverage, limitations and exclusions.

What to Expect in a New Home Warranty?

Home warranties may be procured by individuals buying a new or used home, landowner, and persons selling their homes or investors. Each company’s coverage is decided by the terms of its contact, but basic home warranties usually cover the parts and labor on or replacement of chief home systems and equipment.

What’s covered? Most home warranty firms provide a variety of plans, all offering different levels of coverage, so be sure to study the details of any contract before procuring. Even if you decide to renew the contract from your year-to-year, double check the details of your plan as the coverage can change yearly.

Here is a common idea of what a homeowner can wait for to find in each tier of service.

The Bottom Line

A home warranty is not an ideal solution to the risks homeowners face. Before buying one, it’s important that the homeowners read the home warranty contract and consider whether the warranty is probable to pay off. Home sellers who want to provide a warranty to buyers and homeowners or buyers who feel more relaxed having a home warranty should also do extensive research to get a reputable home warranty company that will in fact pay for legal genuine repairs when they are required.

Other home warranty tips –