A home warranty is a service contract that protects your home's appliances and some systems from repairs or possible replacements. A convenient benefit of a home warranty is that when you report an item, they'll assign a service provider to evaluate whether it should be repaired or replaced without the owner having to act as a go-between.
Homeowner's insurance is required by most mortgage lenders when there is an outstanding loan. This coverage protects the structure and the dwelling and the homeowner's personal property from named occurrences like theft, natural disaster, or accident. However, homeowner's insurance does not cover the systems and appliances for repairs or replacements due to normal wear.
The fees for home warranties can vary based on deductibles and how much of the risk the homeowner is willing to accept.
Additional items can be included in the standard coverage, including pool, spa, additional refrigerators, septic tanks, and other things. There may also be some named items that are not covered that could include sprinkler systems, window air conditioning units, or other specific items.
Contracts usually are for one year, may have a waiting period, and typically do not include pre-existing conditions. The premium or fee is paid in advance.
Many homeowners learned about this type of service when they bought a home. It was provided by the seller and probably offered some peace of mind. Home warranties can be purchased even when the house is not being sold and by the current owner. Even rental property owners are using this type of coverage to manage the repairs and replacement expenses.