{"id":161147,"date":"2023-10-25T20:14:08","date_gmt":"2023-10-26T02:14:08","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=161147"},"modified":"2024-02-28T13:49:39","modified_gmt":"2024-02-28T20:49:39","slug":"what-is-a-home-warranty","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/what-is-a-home-warranty","title":{"rendered":"Complete Guide to Home Warranties"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC5348297968\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p class=\"wp-block-paragraph\">Do you have a home warranty? In the world of homeownership, some people want to have peace of mind regarding things like home repairs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Real estate investors can choose whether to carry a home warranty versus something like homeowner\u2019s insurance, which is required.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whether you&#8217;re a new real estate investor or a seasoned one, understanding the ins and outs of home warranties can make all the difference in preserving your home&#8217;s value and minimizing unexpected expenses.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this article, we\u2019ll take a look at what exactly a home warranty is, the benefits, and more.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Is a Home Warranty?&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A home warranty covers repairing and replacing certain appliances and home systems. Coverage differs depending on the issuer, but often, appliances, heating, and AC systems are included.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Differences Between Home Warranty and Home Insurance<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s talk about the difference between a home warranty and home insurance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Home insurance<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Home insurance is designed for unexpected events, like theft, hail damage, and fire. Home insurance doesn\u2019t cover the expected, meaning if your hot water tank or HVAC system breaks down, that\u2019s more in the realm of a home warranty instance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Home warranty<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A home warranty is different from a homeowners&#8217; insurance policy. Home warranties are not a form of insurance. They are service contracts between a home warranty company and a homeowner for providing repair or replacement services, covering only the failure of housing systems and appliances. If your washing machine breaks, your home insurance will be useless.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How Does a Home Warranty Work?&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">With a home warranty, you\u2019ll often call the home warranty company if something is awry, and they will <a href=\"https:\/\/www.biggerpockets.com\/blog\/how-to-find-keep-good-contractors\" target=\"_blank\" rel=\"noreferrer noopener\">hire a contractor<\/a> to come out and fix the issue. Often, they\u2019ll charge a service fee, which the homeowner is typically responsible for.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After the contractor assesses the situation, they\u2019ll determine whether a repair or replacement is needed and contact the home warranty company. If covered, the home warranty company pays the contractor for the repair cost and any replacement costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s say you purchased a washer two years ago. The manufacturer\u2019s warranty has expired, but you have a home warranty. Assuming your washer is a covered appliance, it will be replaced free of charge.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, it\u2019s not always that easy. Pay attention to any stipulations and exclusions, which might exclude some repairs or replacements.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How Much Does a Home Warranty Cost?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A home warranty typically costs between $300 and $600 for a one-year contract term, with an average of $400 for basic coverage. Additional coverage, like for a pool or guest house, might cost more. When choosing a company, compare service charge fees, too.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Most home warranty plans are paid for upfront, although some companies offer installment plans. A home\u2019s age generally does not play a part in pricing, unless it\u2019s new construction, which tends to increase the cost.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For older properties you intend to rent out, they might merit more consideration: Home warranties are an easy, hands-off <a href=\"https:\/\/www.biggerpockets.com\/blog\/what-is-a-landlord\" target=\"_blank\">landlord<\/a> strategy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even with a home warranty, however, the homeowner may have to pay for repairs out of pocket. Companies can deny repairs or replacements for various reasons, such as the lack of proper maintenance\u2014so don\u2019t skip replacing air filters or de-linting your dryer just because you have a warranty.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Service fees range from $50 to $100. If more than one service provider comes out\u2014for instance, a broken dishwasher requires an electrician and a plumber\u2014you might pay multiple service call fees.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Does a Home Warranty Plan Cover?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Although coverage varies based on the company, the typical home warranty coverage will include major systems like:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Air conditioners&nbsp;<\/li>\n\n\n\n<li>Plumbing system<\/li>\n\n\n\n<li>Furnace and heating system&nbsp;<\/li>\n\n\n\n<li>Electrical systems&nbsp;<\/li>\n\n\n\n<li>Major appliances, such as oven and dishwasher<\/li>\n\n\n\n<li>Doorbells<\/li>\n\n\n\n<li>Water heater&nbsp;<\/li>\n\n\n\n<li>Garbage disposals&nbsp;<\/li>\n\n\n\n<li>Some indoor plumbing issues&nbsp;<\/li>\n\n\n\n<li>Ceiling fans<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What Does a Home Warranty Plan Not Cover?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Most home warranties will exclude coverage of certain things, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Most faucet repairs&nbsp;<\/li>\n\n\n\n<li>Anything outdoor<\/li>\n\n\n\n<li>Pools and spas&nbsp;<\/li>\n\n\n\n<li>Separate structures, such as guest houses&nbsp;<\/li>\n\n\n\n<li>Items that are broken before closing on a property<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">In most cases, the items not covered as part of the basic coverage can be added for an additional fee. Check your home warranty contract to know exactly what\u2019s included.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to Choose the Right Home Warranty<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Of course, you want to know how to go about choosing the proper home warranty. Here are a few steps you can take to figure out what home warranty is the best.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Choose a plan<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Sometimes providers organize plans by looking at the number of items covered, coverage of the type of item, and items in the home. Take note of the items in your home and weigh your coverage options before buying a plan.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Sample contracts<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Home warranties might be like reading the dictionary (unless you\u2019re into that). There\u2019s a ton of fine print in a home warranty. You can read sample contracts to see covered limitations, etc.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Pricing<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Many companies <a href=\"https:\/\/www.hwahomewarranty.com\/professionals\/costs\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">let you pay monthly<\/a> to make plans slightly more affordable if you cannot pay a hefty upfront fee. Again, it depends on the appliances and systems in the home.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Customer service<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">As with anything nowadays, customer service is crucial. If something breaks down, you\u2019ll want an immediate response to get things rocking and rolling again.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Gather quotes<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Get at least three quotes from home warranty providers near you. You\u2019ll be able to see the pricing variations between different companies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Home Warranty FAQs<\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1698285326833\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">What is the purpose of a home warranty?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>It\u2019s all about protection of appliances and systems within the home. It\u2019s like a service contract that covers general wear and tear.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1698285343807\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">What are the benefits of having a home warranty?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>It\u2019s peace of mind. Sure, it won\u2019t cover everything, but it will <a href=\"https:\/\/www.biggerpockets.com\/blog\/deferred-maintenance\" target=\"_blank\" rel=\"noreferrer noopener\">cover major repairs<\/a> that could cost you a ton of cash out of pocket.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1698285359532\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">What is a home warranty final notice?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>These are usually scams that tell you that you need to take action to renew your home warranty. A lot of the time, it will contain verbiage that says \u201cfinal notice.\u201d<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1698285374806\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">What is a home warranty letter?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>These types of letters are mailed out to <a href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-85\" target=\"_blank\" rel=\"noreferrer noopener\">new homeowners<\/a> to alert them that their homes may not be covered by a warranty. They are typically mailed out based on information available within public databases.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1698285388091\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \">What is a dollar limit on a home warranty?<\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Home warranty coverage limits refer to the cap on the dollar amount each plan will pay for covered repairs or replacements per contract term. It depends on your specific plan. With appliances, coverage limits vary.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\">Will You Get a Home Warranty?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A home warranty might not make sense for some, but it is a must for other homeowners. When a homeowner invests in a home warranty, they don\u2019t think of it as breaking the bank, and a lot of the time, it can be very affordable, depending on the number of appliances and systems.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So will you get a home warranty? Why or why not? Comment below.<\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_aa910ac1e56eafb3a4b8131e96fb6a46\" class=\"visibility-group  hidden\">\n        \n\n<div id=\"hero-block_9ba5911f5b5c13c78f51ab55e76cfa36\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-theme-gold-color has-text-color has-large-font-size wp-block-paragraph\" style=\"font-style:normal;font-weight:800\">Get the Best Loan Today<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color wp-block-paragraph\" style=\"font-size:16px\">Find trusted, <em><strong>investor-friendly<\/strong><\/em> lenders who specialize in your strategy. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<div id=button-custom-event-block_8b27f3cceec7a8e5536f32e9b5baa6aa class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/business\/finder\/lenders\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Lender Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/what-is-a-home-warranty&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-gold-background-color has-text-color has-white-color\" target=\"_blank\">Find a Lender<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Marketplace-Blog-Blocks-Lender-v3.png\" alt=\"investor friendly lender, investor friendly real estate loans\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color wp-block-paragraph\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/what-is-a-home-warranty&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Whether you&#8217;re a new real estate investor or a seasoned one, understanding the ins and outs of home warranties can make all the difference in preserving your home&#8217;s value and minimizing unexpected expenses.\u00a0<\/p>\n","protected":false},"author":613669,"featured_media":161148,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5524,7119],"tags":[],"class_list":["post-161147","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-for-beginners","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/161147","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613669"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=161147"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/161147\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/161148"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=161147"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=161147"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=161147"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}