Step 6: Do You Want a Home Warranty?

A Home Warranty is not the same as homeowner’s insurance, nor is it a replacement for it. Homeowners insurance covers major perils like fires, hail, property crimes, and specific kinds of water damage. On the other hand, a home warranty is a separate contract that covers repairs and replacements for systems in your home.

What does a home warranty cover? A home warranty typically covers appliances and systems like electrical and plumbing, but not exterior features such as the roof or landscaping.

Who pays for the home warranty? It can be negotiated for the seller to provide and pay for it as part of the contract, or you can purchase one yourself. The cost of a home warranty, usually between $500 and $1,000, depends on factors like your home's age and size. When something breaks, there's usually a service call fee of around $100 per visit. While home warranties cover many crucial systems and appliances, premium coverage can be added for items like additional ovens or dishwashers.

If an appliance can't be repaired, the home warranty company will typically replace it with a similar model.

Understanding and using a home warranty for its intended purposes can save you on home repairs and alleviate stress when buying or selling a home.