What Is a Home Warranty?

A home warranty is an optional, annual service contract designed to cover the repair or replacement of major systems and appliances in your home when they fail due to normal wear and tear. Unlike homeowners insurance, which protects you from damage caused by disasters like fire or theft, a home warranty steps in for the everyday headaches, like when the furnace sputters out mid-winter or your dishwasher decides it’s done for good.

Let’s break down what a home warranty covers, when it makes sense, and why it might bring you the peace of mind (and budget protection) you’ve been looking for.

What does a home warranty cover? 

Coverage varies by provider, but most home warranties focus on your home’s major systems and its essential appliances. Some plans might offer add-ons for items like pools, outdoor sprinkler systems, spas, or septic systems, so it’s important that you sit down and read your contract carefully so you understand what’s covered, excluded, or capped. Pre-existing conditions or problems noted during your home inspection may not be eligible for coverage, and issues caused by improper maintenance can also be excluded.

Here’s what a typical plan might include:

• Heating, ventilation, and air conditioning (HVAC)
• Electrical components (such as ceiling fans and doorbells)
• Plumbing systems (such as water heater, toilet, sinks, showers/baths)
• Appliances, such as fridges, dishwashers, ovens, garbage disposals, and washers/dryers (might or might not be covered, depending on your warranty)

What’s not covered under a home warranty?

Here are the systems that are not usually covered by a standard home warranty, depending on your policy:

• Faucets and leaks
• Broken/collapsed plumbing or sewage issues
• Hot tubs and pools
• Well piping
• Structural items like walls, windows, and doors
• Garage doors and tracks
• Freestanding freezers
• Fireplaces
• Inspection items (meaning items that were flagged for repair prior to purchase)

How do home warranties work?

When a homeowner has a home warranty and something breaks, here’s the process that’s usually followed:

1. Contact your home warranty company to file a claim. The timeframe for your claim approval will depend on your warranty company and policy. 
2. The home warranty will contact a contracted service technician.
3. The service technician will schedule an appointment and come to your home to diagnose the issue. Each visit is subject to a deductible, depending on the terms of your warranty. Usually it’s between $50 and $100. 
4. The service technician will either repair the appliance or service or suggest a replacement. Not all warranties cover replacements.

How much does a home warranty cost?

When purchasing a home warranty, expect to pay between $350-$700 for one year of coverage. The cost of the premium is paid in advance, and any deductibles are paid at the time a claim is made.

Many different companies offer home warranties, so it’s worth shopping around to find a warranty with the lowest price and best coverage.

Can my home warranty claim be denied?

As with any warranty policy, your claim can be denied for a number of reasons, and even with a policy in place, there’s no guarantee an issue will be covered. For example, if the previous homeowner didn’t have their furnace maintained regularly, your repair claim could be denied.

Here are some common home warranty stipulations that could limit your coverage or lead to a denied claim:

• Lack of maintenance/upkeep
• Home inspection items
• Unpermitted work
• Improper install
• Excessive wear and tear
• Aging or broken appliances

How long does a home warranty last?

Home warranties typically provide one year of coverage. Homeowners are usually offered the option to extend the coverage for a second year. If you negotiated the warranty as part of your home purchase, the seller will usually only pay for one year of coverage. After that, you’ll be responsible for either extending coverage or paying for repairs out of pocket.

Is a home warranty worth it? 

Deciding if a home warranty is right for you depends on your situation, your home, and your comfort level with risk. For many homeowners, a home warranty offers more than just cost savings. It’s about reducing stress and gaining peace of mind:

• Peace of mind: No more sleepless nights wondering how you’ll handle the next unexpected breakdown.
• Financial predictability: Trade surprise expenses for a predictable annual fee and set service charges, giving your budget some breathing room.
• Convenience: When something fails, you won’t need to scramble to find a contractor — our warranty provider connects you with vetted pros.
• Stronger home sale appeal: Planning to sell? Offering a home warranty as a concession to buyers can make your property stand out and help them feel more confident about making an offer.

Do I need a home warranty?

You aren’t required to have a home warranty, but a policy can be useful if you don’t have a lot of cash for unexpected repairs or if you want peace of mind for your first year of homeownership. You may not need a home warranty if:

• You’re living in a brand-new home with appliances still under manufacturer warranties (some builders even provide their own coverage — ask before you buy).
• You’re confident in your DIY repair skills and can tackle most issues yourself.
• You prefer to save for repairs in your emergency fund rather than paying for an annual plan.

Should you get a home warranty?

Every homeowner’s situation is unique, but a home warranty can be a valuable tool for protecting your budget, your sanity, and your home investment, especially if you’re new to homeownership or dealing with aging systems. You could benefit from a home warranty if:

You’re a new homeowner 

Buying your first home is exciting, but it also comes with a learning curve. A home warranty can provide protection while you adjust to the realities of homeownership. (Need more guidance on getting started? Check out these tips on home maintenance and the cost of buying a home — both of which can help with the transition.)

Your home has aging systems or appliances

When your HVAC, plumbing, or fridge is near the end of its lifespan, a warranty can save you from expensive repair or replacement costs.

You’ve purchased an older home

Older homes are full of charm, but often come with outdated equipment that’s prone to breakdowns. A warranty can soften the financial blow when things go wrong.

You’re budget-conscious

If you’d rather pay predictable service fees instead of facing surprise four-digit repair bills, a home warranty can help smooth out your household expenses.

If you’re still not sure, talking through your options with a professional can help. Zillow’s partner agents are here to guide you. They can help you find your dream home, and navigate everything that comes after, from understanding warranties to planning your next move. Reach out today and take one more step toward feeling truly at home.