If you own a house, you may have wondered: What does a home warranty cover? Whether you recently bought a home that came with a warranty, or you’re thinking about getting one for a house you already own, here’s what you can expect it to cover.

Key Takeaways

  • A home warranty is different than a home insurance policy.
  • Home warranties provide discounted repair and replacement services for household appliances and systems.
  • Most home warranty companies offer plans that cover either appliances or systems and hybrid plans that cover both.
  • With a home warranty, you pay a monthly or annual fee. In exchange you get a set service call fee every time an appliance or system breaks down.

What Is a Home Warranty?

Most homeowners are familiar with homeowners insurance, which covers the structure of your house and your personal belongings against damages due to theft, fire, weather, and liability claims. Home warranties also protect your investment, but they work differently.

If your dishwasher leaks, homeowners insurance should pay for the water damage but not the dishwasher repairs. A home warranty, on the other hand, should cover the dishwasher repairs but not the water damage. 

A home warranty is a service contract that helps cover the cost of repairing (or replacing) certain appliances and systems. In exchange for paying a monthly or an annual fee, you pay a set service call fee anytime there’s an unexpected problem with, say, your washing machine, refrigerator, HVAC system, or the like.

What Does a Home Warranty Cover?

A home warranty provides discounted repair and replacement services for covered household appliances and systems. In general, you don’t need to provide maintenance records or get an inspection to buy coverage, and it doesn’t matter if your home is brand new or decades old.

Home warranties on newly built homes typically have coverage time limits, such as 10 years for structural defects; two years for HVAC, electrical, and plumbing systems; one year for walls and paint; and six months for appliances.

Most home warranty companies offer plans that cover either appliances or systems—and hybrid plans that cover both. Depending on the company and the plan you choose, here’s what an appliance plan might cover:

Attic fans Garbage disposals
Bathroom exhaust fans Instant hot water dispensers
Built-in food centers Kitchen fans/exhaust hoods
Built-in microwaves Ranges/ovens/cooktops
Built-in trash compactors Refrigerators
Dishwashers Refrigerator ice makers
Freestanding ice makers Wall ovens
Garage door openers Washers/dryers

Appliances can be expensive to repair or replace, but when a major household system breaks, it can cause serious financial hardship. The good news is that home warranty plans cover systems, either as a stand-alone plan or in tandem with an appliance plan. These plans typically offer coverage for the following systems (again, depending on the company and plan you opt for):

Attic fans Humidifiers
Built-in whirlpools/jetted tubs Interior electrical
Burglar and fire alarms Plumbing (excludes fixtures)
Ceiling fans Re-key services
Central air conditioning Smoke detectors
Central home heating Sump pumps
Central vacuums Telephone lines 
Doorbells Toilets
Ductwork Water heaters

Certain items, including doorbells and attic fans, may be covered under an appliance plan or a system plan, depending on the company. Read the policy details to learn what your plan includes.

A company’s standard plan may not cover all the appliances or systems you have in your home. However, most companies offer add-ons that make it possible to get the coverage you need—at an added cost, of course. Here are some common add-ons that home warranty companies may offer:

Extra air conditioners Pools/saltwater pools
Extra hot water heaters Septic systems
Extra ranges/ovens/cooktops Spas
Extra refrigerators and freezers Stand-alone freezers
Electronics Sump pumps
External water or sewer lines Tankless water heaters
Faucets and fixtures Water softeners
Food loss Well pumps
Guesthouses Whole-house humidifiers
Lawn sprinkler systems Wine refrigerators

Home Warranty Coverage Limits

No matter what your home warranty plan covers, annual coverage limits will determine how much the company will pay to diagnose, repair, and replace each covered item. Of course, these coverage limits vary dramatically by company. For example, one home warranty plan might cap coverage at $500 per appliance, while another might cover up to $5,000 per item. Sometimes contracts have separate caps for each item, such as $500 for the washing machine and $1,000 for plumbing.

Keep in mind that the plans also have aggregate limits—the total amount the company will pay for all covered losses during one time period (usually a year). So, for instance, the plan may cover up to $5,000 per item, with an aggregate for all claims of $15,000.

What Don’t Home Warranties Cover?

While home warranties cover many appliances and household systems, some items are generally excluded. These may include (but are not limited to):

  • Structural issues, foundations, walls, paint, and flooring
  • Solar systems and components
  • Commercial-grade equipment or systems, such as Bosch, GE Monogram, Sub-Zero, Thermador, and Viking
  • Anything a home inspector has previously uncovered (because you already knew about the problem).
  • Preexisting conditions and normal wear and tear
  • Problems related to rust, corrosion, and sediment
  • Repairs related to improper maintenance, installation, design, manufacturer defect, or previous repairs (outside of the contract)
  • Nonessential components, which include items that covered items don’t need to function, such as oven racks, remote controls, clocks, and timers
  • The identification, detection, abatement, and removal of hazardous substances, such as asbestos, radon gas, and mold
  • Services to correct building and zoning code violations

If you receive a home warranty when you buy a new home, the coverage should kick in right away. However, if you buy a contract for your existing home, you’ll probably have to wait 15 to 30 days before making a claim.

The Bottom Line

A house is the largest single investment most people make. A home warranty can be an excellent way to protect your investment—especially when you pair it with a good homeowners insurance policy. Together, home warranties and homeowners insurance offer peace of mind and help protect you from what could otherwise be devastating financial losses.

If you’re considering a home warranty, be sure to read the contract very carefully before you sign on the dotted line. Make it a point to understand what’s covered, what’s not, and how the coverage limits work. That way you can avoid any surprises if one of your appliances or household systems breaks down and needs to be diagnosed, repaired, or replaced.