Understanding Home Warranty: What It Is and Why You Need It

Many individuals confuse home insurance with home warranties, mistakenly believing they are the same or that warranties are part of insurance coverage. However, this is a misconception. A home warranty specifically protects your appliances and systems from repair or replacement costs, whereas home insurance covers the broader property against risks like theft or natural disasters but does not include appliance coverage.

A home warranty is a contractual agreement between you and a provider, ensuring repairs for major or minor appliances, electrical systems, and plumbing. It is especially beneficial if you own older appliances, lack the time or expertise to handle repairs, or want to safeguard against expensive service costs.

For new homeowners, purchasing a home warranty during closing is often advisable. Existing homeowners can also benefit from renewing or acquiring a warranty to ensure peace of mind. Regular inspections can help identify aging appliances and systems, highlighting the need for servicing or replacement. Having a warranty alleviates the burden of these costs, as the provider assumes responsibility under the contract.

Before signing, review the coverage list to confirm which appliances are protected. Typical coverage includes electrical systems, appliances, HVAC, and some plumbing components, although fixtures may sometimes be excluded. Home warranties offer several advantages: they help manage costly repairs, cover essential appliances, and facilitate multiple service visits with a single plan, making home maintenance more manageable and predictable.