Home warranties can give buyers the peace of mind they’re looking for when buying a pre-owned house. They can also be an excellent way for sellers to ‘sweeten the deal’ with a buyer. A home warranty can help to protect buyers against the risk of costly repairs and the replacement of major appliances.

Home warranties are not a one size fits all solution, however, and there are a few things you should know if you plan to purchase one (or have the seller buy one on your behalf) for your new home.



A Home Warranty Is Not The Same As Home Insurance

Home warranties cover home appliances and major systems, such as the HVAC or electrical system. If an appliance — which is covered by a home warranty — fails, it is typically repaired or replaced. Home insurance, on the other hand, covers the structure and foundation of the home, from issues such as fire damage or natural disasters. It can also include your belongings and possessions inside of the house from damage or theft.



Not All Home Warranties Are Created Equal

As stated above, home warranties typically include your HVAC, electrical, and plumbing system. These are major systems that require immediate repair or replacement if they fail. Not all home warranties cover all appliances though, for example, some policies may cover minor appliances such as your dishwasher, and others may not. The coverage you receive is dependent on your particular home warranty plan.  It’s important to discuss your chosen plan in depth with the warranty issuer to ensure that you’re aware of your coverage.



House Warranty


Home Warranties Are Not Retroactive

Taking out a home warranty will not cover you against any existing issues that your systems and appliances have. This is why it is so important as a buyer to have a home inspection. Defects or system failures which are noted during the home inspection are ‘known conditions,’ and are not typically covered by your home warranty. If however, you move into your home and a problem that was not previously known comes to light, your home warranty will usually cover this.



Read The Fine Print

According to the Better Business Bureau, home warranty companies are subject to thousands of complaints each year. It is vital that you read the fine print of any home warranty plan that you take out. Oftentimes there can be exclusions in your coverage, which can lead to costly repairs or replacements if you’re not aware.

Even the most comprehensive cover can still include exclusions in the plan. For example, most home warranties do not include refrigerator ice makers, as they tend to break often. Be sure to read all paperwork thoroughly — and ask questions if you’re not sure.


Home warranties can be a great way to protect yourself from the unexpected expenses of homeownership. In order to get the best deal, think carefully about how extensive you require your coverage to be. If the home is relatively new, you may not need a warranty that is as comprehensive as you would need for an older home.