WHAT EXACTLY IS A

Home Warranty

Every homeowner on the planet knows how expensive it is to have to repair or replace major appliances or home systems.

 

Calls to plumbers, electricians, and carpenters of all kinds inevitably end up tossing homeowners hundreds if not thousands of dollars. Even for seemingly small projects that most first-time homeowners never think about!

Thankfully though, you don’t have to sink your financial future when these inevitable “surprises” – emergencies, really – pop-up.

With the help of a quality home warranty you’re able to avoid those issues entirely.

Providing you with plenty of financial protection, as well as quite a bit of peace of mind, a smart home warranty from a trusted company is always a strategic and savvy financial decision.

In this detailed guide we cover just about everything there is to know about home warranties, how to find the right ones for your needs, and how to move forward with the protection you deserve.

Before we get into the meat and potatoes it’s important that we go over what home warranties really are (and what they aren’t).

Let’s get right to it.

Home Warranty Overview

Every homeowner on the planet knows how expensive it is to have to repair or replace major appliances or home systems.

Calls to plumbers, electricians, and carpenters of all kinds inevitably end up tossing homeowners hundreds if not thousands of dollars. Even for seemingly small projects that most first-time homeowners never think about!

Thankfully though, you don’t have to sink your financial future when these inevitable “surprises” – emergencies, really – pop-up.

With the help of a quality home warranty you’re able to avoid those issues entirely.

Providing you with plenty of financial protection, as well as quite a bit of peace of mind, a smart home warranty from a trusted company is always a strategic and savvy financial decision.

In this detailed guide we cover just about everything there is to know about home warranties, how to find the right ones for your needs, and how to move forward with the protection you deserve.

Before we get into the meat and potatoes it’s important that we go over what home warranties really are (and what they aren’t).

Let’s get right to it.

 

(Almost) Always a Year to Year Contract

To put it plainly, home warranties are like any other warranty you might by for your favorite gizmos and gadgets, electronics, and other major purchases.

There are a lot of different plans out there to pick and choose from, but the majority of home warranties are going to protect your major appliances and/or major home systems – plumbing, electrical, HVAC, etc.

On top of that, the majority of these home warranties are going to be offered on a year-to-year basis. They almost always have 12 month term limits that need to be refreshed or canceled. This gives you a lot of control over how much you’re spending on this coverage – as well as what gets covered, too.

It is important to know that a lot of reputable home warranty companies do have “automatic enrollment” programs attached to their warranties. This means that at the end of your 12 month term a new one will be started, based off of the previous financial and coverage agreements, unless you expressly cancel the warranty ahead of time.

Not all plans are like that (though most are). You want to read the fine print of your home warranty before you sign on the dotted line nonetheless.

Coverage for Major Home Systems and Components

As we highlighted above, home warranty plans are going to offer coverage and protection for major home systems (like your plumbing systems, electrical work, HVAC and central air systems, etc.) as well as a lot of your big appliances.

The beauty of these popular plans is that you are always in the driver seat when it comes to deciding what you want to protect with these warranties to begin with.

If you only want to get protection for issues that might arise with your kitchen appliances, for example, that’s not hard or expensive to do. If all of your appliances are brand-new and covered by manufacturer’s warranties but you want to protect your electrical or plumbing systems from failure (because the house is a little bit older) you can do that, too.

Combination coverage options are available as well. But that’s something that we dig a little deeper into in just a moment.

Extra Coverage Only – A Home Warranty is NOT Home Insurance

One of the most important things to understand about home warranties is what they are NOT, though.

Far too many new homeowners are under the impression that a home warranty is a form of insurance or a replacement for traditional homeowners insurance. Nothing could be further from the truth.

A home warranty is always extra coverage and protection that goes above and beyond your homeowners insurance. If you’re carrying a mortgage you’re still going to need traditional homeowners insurance (and even if you aren’t, it’s not a bad idea to protect one of lights biggest financial investments with coverage anyway).

All home warranties add protection on top of what you to get through homeowners insurance, usually filling in the gaps left by traditional homeowners insurance programs. They work together rather than replace one another.

Frequently Asked Questions

Most Home Warranties are Broken Down Into Three Categories

As far as the types of coverage that home warranties provide, there are a couple of different options you’ll be able to pick and choose from.

Most plans are going to break down into three distinct categories, though:

  • Home Appliance Warranties
  • Home System Warranties and
  • Whole Home Protection Plans

The budget that you have available, the protection that you are most interested in, and the agreement that you signed up for will have a huge impact on which type of category your warranty falls into.

Let’s get a little deeper into these different options.

Home Appliance Warranties

All of your common major home appliances are going to be covered by home appliance warranties.

We are talking about things like:

  • Air Conditioning Units
  • Dishwashers
  • Garbage Disposals
  • Laundry Machines – Washers and Dryers
  • Microwaves
  • Oven and Stove Appliances
  • Refrigerators and Freezers (Including Standalone Units)

As well as most any other major appliance you might have spent a few hundred or a few thousand dollars on.

Ancillary coverage options on specific appliances that are not going to fall under this “umbrella” coverage are usually available, too. We are talking about optional coverage for your swimming pool and pool equipment, any spa or hot tub equipment, or major tools and the like.

These are some of the most popular home warranties available, especially if homeowners are going to be “inheriting” major appliances when they purchase a new property. You never really know how well those appliances were taken care of, whether or not they were maintained or serviced, and how much life they might have left.

A home warranty that covers major appliances can give you a lot of peace of mind.

Home System Warranties

Home system warranties provide coverage for all of the major home systems that make your house a home in the first place.

We are talking about things like:

  • Electrical wiring systems
  • Any and all ductwork
  • Heating and cooling technology
  • Interior plumbing
  • Water heater technology

Once again, there are ancillary coverage options that you have to add to home system warranties that provide protection for things like exterior plumbing, sprinkler system, septic tank or well systems, etc.

These kinds of plans are very popular (for obvious reasons) regardless of whether or not the home you just purchased is relatively brand-new or has a few decades already underneath its belt. These kinds of home systems are always expensive to have worked on, always expensive to have repaired, and almost unbelievably expensive to have replaced or totally upgraded.

Home warranty plans that include protection for home systems can help you save thousands of dollars (literally) that you would have had to spend out-of-pocket otherwise.

Whole Home Protection Plans

Sometimes called “comprehensive coverage” plans, these kinds of whole home protection offers are going to make sure that you have both your appliances as well as your major home systems taking care of.

Combining the two major groups under a single umbrella is an easy way to get top to bottom coverage (excluding the extras you have to pay separately for) while still saving a lot of money. The majority of companies out there that offer these kinds of plans give you a significant discount when you combine coverages like this – offering a lot of incentive to go in this direction.

Lastly, you do have a bunch of separate options that you might choose to take advantage of.

Specific coverage plans may only cover a handful of appliances or systems while optional coverage choices will provide ancillary protection for things like standalone freezers, dedicated HVAC systems, central air/vacuuming systems, and the like – options that wouldn’t have been covered otherwise.

Only you will know if those kinds of coverage options are a smart addition to your plan moving forward or not. This is something that you want to figure out in advance, well before you start to “window shop” for different home warranty offers.

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