What Does a Home Warranty Cover?

A home warranty is a service contract that helps pay to repair or replace major home systems and appliances when they break down from normal wear and tear. It is not homeowners insurance, and it does not cover everything in your house. Understanding the typical coverage categories makes it much easier to compare plans.

Home warranty vs. homeowners insurance

These two products do different jobs:

• Homeowners insurance covers sudden damage from events like fire, storms, theft and some types of water damage. It also typically includes liability coverage.
• A home warranty covers breakdowns of systems and appliances from normal use and age, like a water heater that stops heating or a dishwasher that stops draining.

Many homeowners have both. Mortgage lenders typically require insurance, while a home warranty is optional.

Systems commonly covered

Most home warranty plans offer a systems tier or include systems in a combined plan. Common systems include:

• Heating systems, such as furnaces and some heat pumps
• Air conditioning, often central AC units. See air conditioning coverage.
• Ductwork connected to the heating and cooling system
• Electrical systems, including wiring, panels and outlets
• Plumbing, such as leaks and breaks in supply and drain lines
• Plumbing stoppages, like clogged drains, within plan limits
• Water heaters, both tank and sometimes tankless

Appliances commonly covered

Appliance tiers or combined plans often include:

• Refrigerator
• Oven, range and cooktop
• Dishwasher
• Built-in microwave
• Clothes washer and dryer
• Garbage disposal
• Garage door opener
• Ceiling fans

Not every plan includes every appliance. Washers, dryers and a kitchen refrigerator are sometimes included only in higher tiers.

Optional add-ons

Many providers let you add coverage for items that not every home has, for an extra cost:

• Pool and spa equipment
• Well pump
• Septic system or septic pumping
• Sump pump
• Second refrigerator or standalone freezer
• Limited roof leak repair

You can browse the full list of covered items to see how coverage is typically grouped.

What home warranties usually exclude

Exclusions are where plans differ most, so read them closely. Common exclusions include:

1. Pre-existing conditions that existed before coverage started
2. Improper installation or code violations, including the cost to bring something up to current code, unless the plan includes code upgrade coverage
3. Lack of maintenance, such as a furnace that failed because filters were never changed
4. Cosmetic issues, like dents or broken knobs that do not affect function
5. Damage from accidents, pests, weather or flooding, which typically falls under insurance
6. Permits, haul-away and access costs, such as cutting into walls, unless specifically included
7. Specific parts, like refrigerant recovery, ice makers or certain components, depending on the plan

Coverage limits and service fees

Beyond what is covered, pay attention to how much is covered:

• Service call fee: The amount you pay each time a technician visits.
• Per-item limits: Caps on how much the plan will pay for a single system or appliance.
• Annual or contract limits: An overall cap for the contract term.
• Repair or replace decisions: The provider usually decides whether to repair or replace, and may offer cash instead of replacement in some cases.

A plan that covers many items with very low per-item limits may leave you paying a large portion of a major repair.

Before you buy, ask for a sample contract and read the coverage, exclusions and limits sections together. The brochure lists covered items, but the contract explains the conditions. If something important to you is unclear, ask the provider to point to the exact language that covers it.

How Warranty Wizards can help

We help homeowners compare plans from independent home warranty providers and explain what each one covers, excludes and caps before you buy. To learn more, visit our home warranty overview or request a free quote at /get-a-quote/.