home warranty is not the same thing as homeowners insurance, nor is it a replacement for homeowners insurance. Homeowners insurance covers major perils such as fires, hail, property crimes, and certain types of water damage that could affect the entire structure and/or the homeowner’s personal possessions. On the other hand, a home warranty is a separate contract covering repairs and replacements on systems in your home, usually for a period of one year (note if you’re buying new construction that has never been lived in before then usually the builder will give you a one year warranty and after that the home warranty kicks in for a certain amount of time).  

What does a home warranty usually cover?

Policies differ based on which company your warranty comes from, but in general, a home warranty will cover your home’s appliances and systems such as electrical and plumbing. The home warranty usually does NOT cover exterior issues such as the roof, water intrusion due to a roof issue, fencing, decking, landscaping, anything in a detached garage, etc. The cost and coverage of a home warranty can vary widely, so always compare policies before purchasing.  In general, warranties usually range between $325 – $700 and are good for one year from the purchase date.  Also, while home warranties cover many of your new home’s crucial systems and appliances, those items must be in working order before the contract is entered into with the warranty company. When you buy a home warranty, consider premium and optional coverage to customize the plan to fit your needs, especially if your home has more than one oven, dishwasher, a wine fridge, etc.  These extra appliances may not be covered under the standard warranty.

Who pays for the home warranty?

That depends.  Sometimes we negotiate for the seller to provide a home warranty as part of the contract negotiations. In that case, the home warranty would be provided and paid for by the seller. You’ll then receive the details of the home warranty at the closing.  If we did not ask for a home warranty as part of the contract, then you need to decide if you want to purchase one separately.

How much does a home warranty cost?

The cost of the home warranty depends on several factors such as how old your home is, how big it is, and what you want covered. Usually the cost is between $500 – $1,000.  In addition, if something breaks and the home warranty company needs to come out, some companies require a service fee call of approximately $75 per trip.  Be sure to shop around and ask those questions. With most warranty programs, there are no additional fees to repair an item beyond the service fee call.

What if an appliance can’t be repaired and needs to be replaced?

The home warranty company will try repairing the item first.  If that doesn’t work and the appliance needs to be replaced, some companies will replace the item with a model that has similar features.  For instance, if you have a fridge that has an ice machine and a water dispenser you’ll get one with the some features. However, it most likely won’t be the same brand. For instance, American Home Shield normally replaces all appliances with a GE brand. Therefore, if you have a Subzero fridge, you’re most likely not getting another SubZero. Instead you’ll get a GE fridge with similar features. If you really want a Subzero, most warranty companies will give you the cost of the GE fridge in cash and you can put it towards purchasing the Subzero on your own. Again, you have to ask these questions when you are shopping around for your policy.

Where can I buy a home warranty?

If the seller is not providing you with a home warranty and you want to purchase one, there are many reputable companies such as American Home Shield, ECM and HSA Home Warranty.  You can most likely get a free quote online. This is something you would take care of prior to closing and would ask to have the home warranty start the day of closing.

When a home warranty is understood and utilized for its intended purposes, it can be the easiest way to save on home repairs and reduce the extra stress that comes with buying or selling a home.

If you have any questions, be sure to email me or call at 954-464-5434.