Do You Want a Home Warranty

Understanding Home Warranties: What You Need to Know

A home warranty is not the same as homeowner’s insurance, and it does not replace it. While homeowner’s insurance protects against major disasters like fires, hail, theft, and water damage, a home warranty is a separate service contract that covers repairs and replacements for home systems and appliances due to normal wear and tear.

If you’re purchasing a brand-new construction home, the builder typically provides a ten-year home warranty which covers major structural defects, while smaller issues like workmanship and systems like plumbing or electrical might have a shorter warranty period of 1-2 years depending on the builder and state regulations.  After that, you may choose to purchase a home warranty for additional coverage.

What Does a Home Warranty Cover?

Home warranty coverage varies by provider, but it typically includes:
✔ Major home systems – Electrical, plumbing, heating, and cooling (HVAC)
✔ Appliances – Refrigerator, oven, dishwasher, washer, dryer, and garbage disposal

🚫 What is NOT Covered?

• Exterior issues – Roof leaks, siding, windows, fencing, and decks (We only know of one home warranty that covers roof leaks but please make sure you read the fine print.)

• Landscaping & outdoor structures – Detached garages, pools, or sheds

• Pre-existing issues – Items must be in working condition when the warranty starts

Pro Tip: If your home has specialty appliances like a wine fridge, dual ovens, or an extra dishwasher, consider adding premium or optional coverage to ensure they’re included.

Who Pays for a Home Warranty?

It depends.
✔ If negotiated in the contract, the seller may provide and pay for a home warranty as part of the transaction.
✔ If not included in negotiations, you can purchase one yourself before or after closing.

How Much Does a Home Warranty Cost?

💰 Typical Cost: $500 – $1,000 per year
💰 Service Call Fee: $75 – $125 per visit (similar to a co-pay for home repairs)

Factors that affect pricing:

• The age & size of your home

• The level of coverage you select

• Optional add-ons for specialty appliances, pools, or septic systems

Will Appliances Be Repaired or Replaced?

🔹 Home warranty companies will first attempt to repair a malfunctioning item.
🔹 If the repair is not possible, they will replace the item with a comparable model.

Important to Know:

• Replacement brands may differ – For example, if you have a Subzero fridge, a provider like American Home Shield may replace it with a GE model of similar size and features.

• If you prefer a specific brand, most companies will offer a cash payout equivalent to the cost of the replacement model, allowing you to purchase your preferred appliance.

How to Purchase a Home Warranty

If the seller does not include a home warranty, you can purchase one from companies such as:
✔ 2-10 Home Warranty
✔ Choice Home Warranty
✔ Cinch Home Warranty
✔ HSA Home Warranty

Payment Options:

• When purchasing through a real estate transaction, the warranty must be paid in full at closing.

• If purchasing directly online, some companies offer monthly payment options.

Deadline to Buy?

• A home warranty can begin on closing day if purchased before settlement.

• Many providers allow you to start coverage within 30 days after closing.

Is a Home Warranty Worth It?

When understood and used properly, a home warranty can:
✔ Reduce unexpected repair costs for home systems and appliances
✔ Provide peace of mind, especially in the first year of homeownership
✔ Help sellers by covering potential issues during the listing period

If you’re considering a home warranty, we’re happy to help you compare coverage options and pricing to find the best fit for your needs. Let us know if you have any questions!