How long does a home warranty last?
Learn about coverage, costs and renewals
Find Home Warranties, Service Plans near you
A home warranty covers the costs of repairing or replacing important home systems and appliances. Unlike homeowners insurance, which covers damage or loss from unexpected events like fires or theft, a home warranty covers wear and tear of items due to everyday use.
Most home warranty contracts last one year, giving you the option to renew. A home warranty can be particularly appealing to those who own older homes where systems and appliances may be more prone to failure or for new homeowners who may not be familiar with the maintenance needs of their new property.
- Most companies offer home warranty coverage for one year.
- Those selling their home may be able to get shorter plan terms.
- All home warranties differ in what is covered and not covered in plans.
Who should buy a home warranty?
A home warranty can be a good idea for new homebuyers, people in homes with older appliances and systems and those who don’t want to pay out of pocket for repairs. People selling a home may also get one while the house is on the market.
For new homebuyers, a home warranty is a good choice. If the maintenance history of the home's appliances and systems is unclear, a warranty can provide protection against unforeseen breakdowns. A home warranty also helps new homeowners budget for potential repairs with a fixed annual fee instead of unexpected and potentially large repair costs.
Older homes are more likely to have aging heating and cooling systems, plumbing, and electrical systems prone to failure. A home warranty can offset some of these costs.
What does a home warranty typically cover?
A home warranty may cover major systems like heating, electrical, plumbing and cooling and major appliances like refrigerators, ovens, washers and dryers. The coverage can vary significantly depending on the provider and the specific plan.
Home warranty plans can often be customized to cover specific appliances or systems, providing flexibility to match the homeowner's needs.
“Many of the companies have a myriad of choices, including basic plans that cover just the larger-ticket items, like HVAC and plumbing, to more comprehensive plans, covering things like garage door openers, garbage disposals, faucets, electrical, minor roof repairs, etc.,” said Farah Sutton, a real estate agent in Phoenix.
Some commonly covered item include:
- Air conditioning, electrical, heating and plumbing systems
- Water heater
- Built-in microwave
- Refrigerator and freezer
- Garbage disposal
- Washer and dryer
- Central vacuum
- Sump pump
- Doorbell and chimes
- Ceiling fans
- Garage door opener
While home warranties cover a lot, they don’t cover everything. Here are some notable exceptions:
- Preexisting conditions: Repairs or replacements are usually not covered if a system or appliance was not working properly before the coverage began.
- Improper maintenance or installation: Failures due to neglect, lack of maintenance or incorrect installation are generally not covered.
- Certain parts or components: Within covered appliances or systems, there might be specific parts or components that are excluded from coverage. For example, a plan might cover the heating system but exclude the ductwork or include the well pump but not the pipes coming from it.
- Cosmetic issues: Things like scratches, dents or other aesthetic imperfections that don't affect functionality are not covered.
- Structural components: Walls, windows, floors, roofs and other structural elements of the home are typically excluded. Some companies offer add-on coverage for roofs.
- Outdoor items: Items like sprinkler systems, outdoor lighting and landscaping are usually not covered, though some plans may offer additional coverage for pools, spas, well pumps, septic systems and outdoor kitchens.
- Commercial appliances or systems: Appliances or systems used for commercial purposes might not be covered.
- Environmental regulations and building codes: The additional costs might not be covered if a repair or replacement requires upgrades to meet current building codes or environmental regulations.
- Pest damage: Damage caused by insects, rodents or other pests is not covered.
- Acts of God: Home warranties don’t cover damage from natural disasters such as wildfires, earthquakes, floods or hurricanes.
- High-end or uncommon appliances: Some luxury or uncommon brands or models might be excluded or require an additional fee for coverage.
“If you bought your warranty plan assuming your high-end appliance would be replaced with a similar high-end appliance (if the need arose), you could be wrong. Different warranty plans offer different terms when it comes to replacing appliances,” said Kathleen Kuhn, who is the head of business development at Fixle and has over 30 years of experience in the home inspection and home service industries.
- Permits and haul-aways: Costs for permits or the removal of old appliances might not be covered.
- Secondary damage: If a covered item fails and causes damage to other noncovered parts of the home, that secondary damage won’t be covered.
Always research specific home warranty plans to understand what is and isn't covered to make sure you’re fully protected. Also, take stock of what you need covered. “Before you invest in a home warranty, take the time to inventory the major appliances in your home so you know what you have and can better evaluate the extent of coverage available,” said Kuhn.
» LEARN: What is a home warranty?
Length of coverage and renewal
Most home warranty contracts last one year. You pay either upfront or monthly. When your policy’s one-year anniversary comes, you have the option of renewing, changing your plan or canceling.
Some home warranty companies have longer terms, lasting two to three years or more. Often, if you choose a longer term and pay upfront, you pay less.
Some home warranty companies offer short-term coverage, called seller’s coverage, while the home is on the market. This not only adds appeal to potential buyers but also protects the seller from unforeseen repair costs. This contract is intended to be in effect for the time the home is for sale.
When does home warranty coverage begin?
Your home warranty coverage doesn’t start as soon as you sign up if it’s not part of a real estate transaction. Most home warranty plans include a 30-day waiting period before going into effect. This waiting period is to prevent people from signing up just to get an item with a preexisting issue fixed.
How often do you pay for coverage?
How often you pay for your home warranty plan depends on the company and your payment preference. Most companies have options for monthly or annual payments. When you make a claim, you’ll also need to make a payment called a service call fee. It works much like a deductible that you pay at a doctor’s office or when you get your car fixed after an accident.
The overall cost depends on which plan you choose and if you add optional coverage, like for a pool, sump pump or stand-alone freezer. You can expect to pay between $450 and $600 a year, along with a service call fee of $75 to $125 each time you make a claim.
» DIVE DEEPER: How much does a home warranty cost?
Understanding a home warranty contract
It’s important to read the fine print and understand the contract length and exclusions so that you won’t be caught by surprise while filing a claim.
Another reason to read the fine print is that each policy has caps on how much the plan will cover for each repair or replacement. “All home warranty plans have aggregate limits of coverage. This is the maximum they will pay out for a repair or replacement of an item,” said Kuhn, of Fixle. “These aggregate limits can vary depending on the type of system. So knowing the specifics of what you have will help you assess precisely how much coverage you are getting.”
You also want to avoid any hidden fees. Most companies have an annual fee and a service fee. Make sure you know what those fees are so you can adjust your budget. Some companies have extra fees that they put in the fine print, like early cancellation costs. Read everything before you sign up to catch these extra costs.
What are the pros and cons of a home warranty?
Home warranties have both benefits and potential downsides. Sometimes, they can save you money, and other times, they can cause some headaches.
The biggest pro of home warranties is they can make the out-of-pocket costs for repairs and replacements of home systems and appliances much more affordable. The service fee is often much less expensive than what you would pay without the plan.
Home warranty companies also eliminate the hassle of searching for a service professional; companies have their own network of licensed and insured technicians and assign one to your claim. This is often a big timesaver, especially if you’re new to the area and don’t know any reputable contractors.
The biggest con of home warranty plans is the exclusions. Home warranty plans deny claims for preexisting conditions or items that haven’t been properly maintained. Determining when and how the damage happened to a system or appliance can be open to interpretation, but there are ways to protect yourself.
“If you’ve recently had a home inspection, hold on to your report,” said Kuhn. “If you don’t have a report, document that your appliance was in working order, have your appliance serviced by qualified service professionals and keep good service records. This information will be of great value if the issue of preexisting conditions comes up.”
Another con for some homeowners is not being able to choose your own service professional. Home warranty companies largely use their own network of service providers to handle service calls. “While this is not in itself a negative, many homeowners assume when there is an issue that they can call the local company they know and trust,” said Kuhn.
Your home may not be left in pristine condition after the job is done, either. When repairs require access through walls, ceilings, floors and even concrete in some situations, most home warranties will only return access openings to a rough finish. A home warranty also does not cover any consequential damage caused by an appliance or system — though homeowners insurance may cover some.
Are there cancellation fees if I end my contract early?
Possibly. Most companies will let you out of your contract and offer a prorated refund. Some will charge you an administrative fee, though. This fee tends to vary based on the state where you live and the company. Your contract will detail any cancellation fee.
How many service requests can I make during the length of the contract?
Home warranty companies don’t normally have limits on how many service requests you can make — but there are limits on repair costs per item and aggregate costs per year.
Can I transfer a home warranty if I sell my property?
You may be able to transfer your home warranty. Each home warranty company has its own rules, so read over the contract terms or contact customer service for details.
How can I file a claim?
Most home warranty companies let you file a claim online. Some also allow you to file a claim by calling customer service.
What happens if my claim is denied?
Your home warranty company should have a specific appeal process. Keep in mind that you may be asked for purchase, installation and maintenance records when you appeal. If your appeal is unsuccessful, you may choose to seek legal assistance or contact your state’s attorney general. You can also file a complaint with the Better Business Bureau.
- Article sources
- ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Federal Trade Commission, “Warranties for New Homes.” Accessed Aug. 24, 2023.
You’re signed up
We’ll start sending you the news you need delivered straight to you. We value your privacy. Unsubscribe easily.