What does a home warranty not cover?

What does a home warranty cover?

Home warranties cover appliances and systems found in your home. Some of the items typically covered include:

• Dishwashers
• Ovens, stoves and cooktops
• Built-in microwaves
• HVAC systems
• Plumbing
• Electrical
• Refrigerators
• Garbage disposals
• Garage door openers
• Roof leaks
• Pools and spas

Some home warranty companies also offer additional services like rekeying for locks, pest treatment and gutter cleaning. A few home warranties also cover electronics, like laptops and televisions, in add-on packages.

What’s not covered by a home warranty?

While home warranties cover a wide range of things around your home, there are some things it won’t cover. Typically, home warranties don’t include items around your home that are part of the construction. So, home warranties won’t cover any foundation problems, problems with insulation, doors, windows and faulty support beams.

Things found beyond the perimeter of your foundation are typically excluded from your home warranty plan, as well, with the exception of some pipes and a pool or hot tub. Fences, appliances or systems found in guest houses, outdoor kitchens, sprinklers and anything within detached garages are usually not covered.

If you have appliances or systems considered commercial rather than residential, they usually aren't covered under a standard home warranty, either. Be sure to check your contract to see if this may be a problem.

Warranty limitations and exclusions

Home warranty companies usually have a few limitations and exclusions that can prevent certain items around your home from being included in your coverage. Companies often exclude preexisting conditions from coverage, meaning any issues already there before you bought the warranty won't be covered.

Any damage not caused by normal wear and tear isn’t covered, either. This means these situations aren’t covered by your home warranty:

• Damage caused by flooding, fire, accidents
• Items not installed properly or that don’t comply with local building codes 
• Appliances or systems that have failed due to neglect or improper maintenance
• Cosmetic damage like scratches, dents, dings or other visual problems

Coverage caps and service fees

In addition to coverage limits, most home warranty companies charge a service fee each time a technician is dispatched to your home. This fee typically ranges from $75 to $125, depending on the provider and your plan. These service fees are paid out of pocket and are required even if the repair isn’t ultimately covered.

Coverage caps vary by item and provider, so it’s important to review your policy carefully. For example, one company may only cover up to $1,500 for HVAC repairs, while another might provide up to $3,000. After that cap is reached, you’re expected to pay the rest. Understanding these caps can help you avoid unexpected expenses if a repair exceeds your plan’s maximum payout.

Waiting periods and preexisting conditions

Most home warranty plans do not begin coverage immediately after purchase. Instead, there’s typically a 30-day waiting period before you can file a claim. This waiting period is designed to prevent coverage of preexisting problems and fraudulent claims.

Preexisting conditions—issues that occurred before the home warranty was purchased—are almost always excluded from coverage. These can include broken appliances, faulty systems or problems that were known or should have been known during a home inspection. If the issue is found to have existed before coverage began, the provider will likely deny the claim.

It’s important to read the fine print in your policy so you understand exactly when your coverage starts and what qualifies as a preexisting condition.

Bottom line

It's really important to understand what your home warranty doesn't cover to set the right expectations and make the most of your plan. Make sure to give your contract's terms and conditions a good read-through so you know exactly what's included and what's not.