Home Warranty – How to Choose Home Warranty

What is a home warranty and how can you save lots of money with it? If you are looking to get a better understanding of this, you are reading the right article.

Home Warranty
How Home Warranty Can Save You A lot of Money

Home Warranty

This is a residential service contract that covers the cost of keeping household systems or appliances in good working order for a set period of time.

It is not the same as homeowners’ insurance, and it is not the same as a structural warranty, which is used by home builders and buyers but not for existing homes.

How Does Home Warranty Work?

When something goes wrong at home, you file a claim and pay a small service fee if you have a home warranty service contract. Your warranty company will locate and dispatch an authorized service provider to assess and repair the problem.

This saves you the trouble of locating an appropriate handyman or repairman to come take a look.

It can be purchased by a seller to warranty a home to a buyer, or by the homeowner at any time after purchasing the home.

Home Warranty Vs Homeowners Insurance

There are numerous similarities between a house warranty and homeowners insurance. With both policies, you pay a monthly cost as well as a service charge (commonly known as a deductible in the insurance market).

A lot of people make the false assumption that their home insurance will cover any unanticipated costs and liabilities associated with being a homeowner. In reality, it is only used to cover “perils,” which are situations like a fire, a natural disaster, or a burglary.

Your major systems and appliances are guarded against breakdown due to regular wear and tear by a house warranty. Appliances and built-in systems may be covered by some home insurance policies, however these policies often have a large deductible.

A home warranty policy, in many ways, supplements the discrepancies in homeowners’ insurance. A home warranty, for example, may cover the repair or replacement of a broken water heater after years of use, So if your water heater blows up, develops a significant leak, or results in structural damage, you can make a claim with your homeowner’s insurance.

Home insurance and home warranties are not legal requirements for homeownership. However, your mortgage lender may require you to enroll in a home insurance plan when you purchase a home.

Home Warranty Coverage

Coverage here varies according to its provider. A basic plan tier that solely covers appliances or systems is frequently offered by service providers, followed by a more inclusive plan that includes coverage for both built-in systems and appliances.

Read your home warranty contract’s fine print thoroughly before making a claim to be sure you are aware of any restrictions and limitations.

The built-in systems and appliances that are most frequently covered are listed below:


  • Washing machine and dryer
  • Garbage disposal
  • Refrigerator
  • Microwave
  • Range/Oven/Cooktop/Stove
  • Dishwasher

Integrated Systems

  • System of air conditioning
  • Plumbing system
  • Heating system.
  • Electrical systems
  • Water heater.

What They Do Not Cover

Home warranty companies reserve the right to deny coverage due to inadequate maintenance, accidental damage, damage caused by improper installation or adjustment, and pre-existing conditions. The summary of this is;

  • Existing medical conditions
  • Misuse and improper installation
  • Home appliance or system that is still covered by the manufacturer’s warranty
  • Cosmetic flaws
  • Pest infestation
  • New equipment that has been altered or modified

Are They Worth It?

A home warranty may be worthwhile for those who have older appliances or homes.

A home warranty protects the functionality of your home’s systems and appliances when things start to fall apart, but its true value lies in the convenience of not having to do anything yourself: a company sends a service-person to your house without you having to shop around for the best person or company for the job.

If you own a brand-new home or appliance, you may still be protected by manufacturer warranties and may not require a home warranty until your original warranties expire.

How Much Does Home Warranty Cost?

The average annual cost for basic home warranty coverage ranges from $432 to $816, depending on the products and which ones are added to the policy.

In addition to the annual premium, homeowners will usually pay a fee to the servicing contractor, which is commonly referred to as a “service call fee” or a “trade call fee.”

A contractor fee is similar to an insurance deductible. The costs of these fees are determined by a variety of factors. The fee can range from $55 to $150.

How Home Warranty Can Save You A lot of Money

Home warranties can help homeowners end up saving money by covering appliance and other household item repairs and replacements. Here are some of the ways home warranty can save you lots of money.

Protection of Assets

Home warranties are a good investment because they protect assets while also saving money by avoiding out-of-pocket repair costs and protecting major appliance investments.

Savings Short Term

It can help you save money in the short term as well as provide long-term protection. A home warranty, for example, will cover the cost of repairs as well as a replacement if your washing machine breaks down. Depending on the thing that needs to be repaired or replaced, this can save you hundreds of dollars.

Protecting Your Budget

By covering the cost of repairs or replacements up to the policy limit, home warranties can allow residents stay on budget and avoid financial stress.

You Are Connected to Professionals

This warranty offers a network of professionals to assist with repairs and replacements, ensuring that the job is completed correctly and quickly.

It Increases the Value of your Home

Do you intend to sell your home soon? If this is the case, a home warranty can assist you in increasing the value of your home.

Many home buyers are more comfortable purchasing a home with a home warranty. This is because they know they will not have to pay for any necessary repairs or replacements. As a result, they are willing to pay a higher price for the house.

Are Home Warranties Deductible for Tax Purposes?

A home warranty purchased for your primary residence is not tax deductible on your federal return. This is also true for home insurance.

However, if you use a portion of your home as a home office, you can deduct some of the home warranty costs. In addition, if the home is rented out, the IRS allows a deduction for the home warranty.

How Long Does this Last?

The typical home warranty is one year long and can be renewed annually. When you sign up for this, there is usually a waiting period of 10 to 30 days.

You will be unable to file claims during this time. If you intend to use your warranty product to extend or replace a manufacturer warranty, make sure to sign up before your current warranty expires.

Choosing the Best Plan For You

It is very important that you choose the right home warranty that can take care of your house’s need. Here are some steps to help you find the best for your home.

How to choose Hone Warranty
How to choose Hone Warranty

Research and Compare Different Companies 

Ask a realtor for referrals, conduct a Google search for providers of coverage in your region, and visit trustworthy websites like the Better Business Bureau and Best Company while shopping for a house warranty. When selecting a company, consider your options and make an unbiased comparison.

Choose the Plan that Suits You

Look up the top providers in your area, contact them for quotes, get a contract or brochure specific to your region, and learn more about the various plans they provide. When examining the available coverage, keep in mind the systems and appliances you want protected as well as the coverage you require for your house.

You can also add extras to your coverage, depending on the warranty provider.

Make a purchase

From the process given above, you will be able to make a choice according to your requirements. What’s left is to make a purchase.


Enrolling in a home warranty as well as a home insurance policy can help you stay on top of your home’s expenses, especially if you don’t have enough savings to cover unexpected breakdowns.

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