Home Warranties: What They Cover, Who Pays, and What to Know

A home warranty can be a valuable safeguard for homeowners, helping cover the repair or replacement of major home systems and appliances due to normal wear and tear. But how does it work, and who typically pays for it? Let’s break it down.

What Is a Home Warranty?

A home warranty is a service contract that helps cover the cost of repairs or replacements for major home systems and appliances. Unlike homeowners insurance, which protects against unexpected damages like fire or storms, a home warranty focuses on breakdowns caused by everyday use.

What Does a Home Warranty Cover?

While coverage varies by provider, most standard plans include:
✔ HVAC systems (heating & cooling)
✔ Plumbing and electrical systems
✔ Kitchen appliances (ovens, refrigerators, dishwashers)
✔ Washer and dryer

Since coverage details differ, always read the fine print to understand what’s included and excluded in your policy.

Who Pays for a Home Warranty?

Home warranties can be purchased by either the seller or the buyer during a real estate transaction.

Sellers:

🏡 Some sellers offer a home warranty as an incentive to attract buyers and make their listing more appealing.

Buyers:

🔑 Buyers can request the seller to include a home warranty in their purchase offer or negotiate it as part of the repair requests during the inspection contingency.
💰 If not provided by the seller, buyers can purchase a home warranty themselves during or after closing.

Key Considerations Before Purchasing a Home Warranty

Before deciding on a home warranty, keep these factors in mind:

📆 Coverage Length: Most home warranties last one year but can be renewed annually.
💵 Service Fees: Expect to pay a service fee for each claim, typically between $75–$150 per visit.
⚠️ Exclusions Apply: Not all repairs or replacements are covered—some policies exclude pre-existing conditions, improper maintenance, or specific appliances.

Is a Home Warranty Worth It?

A home warranty can provide peace of mind, especially for new homeowners unfamiliar with the condition of major systems and appliances. However, always compare plans, check reviews, and read the fine print before purchasing.

Whether you're buying or selling, understanding how a home warranty works can help you make informed decisions and potentially save thousands on home repairs!