What Is a Home Warranty, Exactly? Your Questions, Answered
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Not all home warranties are created equal. And not all homeowners insurance is created with home warranty in mind. Let us explain: Home insurance and home warranty are different, but in many ways, they also complement one another. Insurance protects; warranty repairs. Insurance covers the dwelling; warranty helps cover the maintenance. So if your solar panels need to be replaced, your refrigerator has stopped working, or your washing machine has finally come to pass, a home warranty plan is there to help you repair and replace the appliance without hassle.
So, are home warranties worth it? And if so, when should you consider adding it onto your home care policies? We did a deep dive, and even spoke to a provider, to take a closer look and get to the bottom of home warranties. Between appliance prices, repair technician costs, and the average lifespan of your everyday home systems, there’s a chance you could benefit from these services.
So, what is a home warranty?
A home warranty is a service contract that covers the cost of repairs and replacements in your home. A home warranty will usually cover your home’s systems and appliances when they break down over time from normal wear and tear, or aren’t working properly anymore.
Are home warranties worth it?
Whether or not home warranties are worth it is entirely up to the individual homeowner. If you value saving money on appliances and on time trying to locate a vetted technician, then a home warranty might be a good decision for you.
Property owners who manage multiple rental units may find home warranties valuable to make as-needed repairs quick and efficient, and likewise, so might any homeowner who wants to streamline the process of repairs, replacements, and services.
How does home warranty differ from homeowners insurance?
Home warranty usually covers repairs and replacements of your everyday home appliances and services, like HVAC systems, plumbing, electrical systems, water heaters, refrigerators, washing machines and dryers, dishwashers, garbage disposals, ovens and stovetops, and things of the like.
Homeowners insurance, however, usually covers sudden, disastrous, or unexpected damages or theft to your property. Coverage specifics can differ from homeowner to homeowner and your individual plan, and depends largely on your environment and needs.
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Can home warranty and homeowners insurance be combined?
Home warranty and homeowners insurance can be combined. Of course, homeowners insurance is a must—you never know when an unexpected disaster or theft might come, and you want to be prepared for it ahead of time. But a home warranty can help with your everyday fixes that are bound to come up, especially with a typical 30-year fixed mortgage.
On average, water heaters need replacing between 6 and 12 years; the average washing machine lifespan is between 10 and 15 years; and dishwashers typically last between 9 and 16 years. Over time, these large appliance costs can really add up.
How do home warranties work?
Home warranty providers all have their own individual policies and protocols, but the way you pay is similar to any other warranty or insurance plan. Typically, the homeowner will pay for some sort of monthly plan, sometimes paired with a flat-rate service call fee associated with repairs. However, unlike a typical home repair, you won’t be liable for the cost of the home appliance or system that’s in need of repair.
According to David Moreno, co-founder of Liberty Home Guard, a nationwide home warranty provider, your provider will be “a central node for you to file a claim with, like the way you would file a claim for a car accident or home insurance. And what we’ll then do is dispatch a member of our network of technicians all across the United States. That technician will come to the home to diagnose the nature of the breakdown and work with that technician to get the issue sorted and solved, assuming it’s a covered claim.”
What else can a home warranty provide?
Depending on the home warranty company you choose, they might have a slew of other offers, services, and perks—even if it’s not covered under your plan. Some might provide access to their service techs even when something breaks that’s not covered, and others might provide access to their inventory of appliances for renovation purposes too, rather than just repairs. Every home warranty provider has a different set of policies and perks, so make sure to look into this when shopping for a provider.
What does home warranty not cover?
Every plan and service provider is different, but usually, home warranties will not cover cosmetic issues (such as paint, dings and scratches, finishes, etc.), pre-existing conditions (any issues that occurred before you signed your contract), lack of maintenance or negligent use of the dwelling and its components, optional or secondary units (appliances or services that are not necessary for the home’s functionality), and other issues, depending on your plan. However, your provider may still have tips, contacts, or services available for you to use without their discount.
Always talk with your provider before signing your contract, and make sure all of your questions are answered before commiting to a proposal. The provider will help you decide on the plan that’s best for you, depending on a variety of factors, like the amount of properties you own, the age of your home and appliances, and many more specifics.
Liberty Home Guard Home Warranty
