As a homeowner, you never really know when an expensive repair might pop up. A furnace that suddenly stops heating, a refrigerator that won’t cool properly, or a water heater that just doesn’t get hot enough anymore can quickly turn into stressful and costly surprises.

One way some homeowners reduce the anxiety of unexpected repairs is by purchasing a home warranty. While home warranties have earned a mixed reputation in the past, many policies have evolved and now offer broader coverage than they once did. Like any protection plan, the key is understanding how it works, what it covers, and whether the cost makes sense for your situation.

Below is a straightforward breakdown to help you decide whether a home warranty is right for you.

What Is a Home Warranty?

A home warranty is a service contract that helps cover the cost of repairing or servicing major home systems and appliances when they fail due to normal wear and tear. Coverage is typically purchased through a home warranty company and renewed annually.

It’s important to understand that a home warranty is different from homeowners insurance or a manufacturer’s warranty:

• A home warranty may cover the labor and repair costs for a failed appliance even after the manufacturer’s warranty has expired.
• It can pay for a plumber to fix a broken pipe, but not the water damage, which is usually handled by homeowners insurance.
• Homeowners insurance covers sudden damage or disasters, while a home warranty focuses on items that break earlier than expected through everyday use.

Think of it like car ownership: insurance covers accidents, while a warranty helps repair mechanical failures.

What Systems Are Typically Covered?

Most standard home warranty policies include coverage for major systems and built-in appliances, such as:

• Heating and air conditioning systems
• Furnace and water heater
• Plumbing systems
• Electrical systems
• Built-in kitchen appliances (refrigerator, dishwasher, oven)

Many companies also offer optional add-ons for an additional fee, such as:

• Pool and spa systems
• Washer and dryer
• Garage door openers

The average cost for a home warranty is around $500 per year, with a service call fee (deductible) of approximately $60- 100 per repair visit.

Who Can Purchase a Home Warranty?

In the past, home warranties were often limited to new homebuyers at the time of closing. Today, many companies allow long-term homeowners to purchase coverage as well. This has made home warranties a more accessible option for homeowners who want added peace of mind, even years after buying their home.

What Should Homeowners Know Before Buying?

Reading the fine print is critical. While home warranties can be helpful, they come with limitations. Common policy details include:

• Repairs are usually covered, but full replacements may not always be included.
• Coverage typically applies to failures caused by normal wear and tear, not poor maintenance.
• Certain components may be excluded (for example, a refrigerator may be covered, but not the ice maker).
• Items beyond their serviceable life (often 20+ years old) may not qualify.
• Pre-existing conditions are not covered systems must be properly installed and functioning when coverage begins.
• Roofs and exterior features are generally excluded.

Understanding these details upfront helps avoid frustration later.

What Happens When Something Breaks?

If a covered item fails, homeowners must first contact the warranty company to file a claim. The company then assigns one of its approved service providers to handle the repair. Once the claim is approved, the warranty company pays the contractor directly.

Important things to keep in mind:

• Calling a contractor without contacting the warranty company first may result in a denied claim.
• You typically do not choose the repair provider, which can be a downside for some homeowners.
• Repair timelines depend on the warranty company’s vendor availability and delays can occur during peak seasons.

What If Something Isn’t Covered?

Just like any warranty or insurance policy, coverage disputes can happen. This is why reading the contract carefully is essential. Knowing exclusions, service limits, and caps ahead of time helps set realistic expectations.

How to Choose a Home Warranty Company

Not all home warranty companies are created equal. Before selecting one, consider:

• Company reputation and length of time in business
• Better Business Bureau ratings and customer reviews
• Coverage limits, service fees, and deductibles
• Optional upgrades and add-ons
• Cancellation policies and refund terms

Some companies consistently perform better than others, and choosing wisely can make a big difference in your experience.

Is a Home Warranty Worth It?

A home warranty isn’t a perfect solution, and it won’t cover every possible issue. Some homeowners are glad they have one after making a claim, while others cancel after a few years because they never needed to use it.

Ultimately, deciding whether a home warranty is worth it depends on factors like the age of your home, the condition of your systems, your budget, and your tolerance for unexpected expenses.

If you’d like help deciding whether a home warranty makes sense for you or want recommendations on companies that tend to perform better based on real-world experience feel free to reach out. I’m always happy to help you make informed decisions about your home.

Simply email me here to start the conversation: James.Daniel@exprealty.com