HomeHome ImprovementHow Does a Home Warranty Work?

How Does a Home Warranty Work?

Home warranties offer peace of mind for many buyers and sellers alike. Although they are often expensive, the “peace of mind” factor is something that many people value. In addition to providing peace of mind, they can also help you sell your home. Buyers may be worried about damage from previous owners or vandals. But the good news is that home warranties have relatively low claims costs compared to other insurance policies.


To determine the right coverage for you and your budget, compare plans. You can choose a basic strategy for a low cost or an extended warranty plan for extra coverage. Be sure to read the fine print and make sure that you understand the limits of each plan. Some home warranty plans may not cover pre-existing issues, so you need to know the limitations before signing up for a plan.


Home warranties may cover various issues, but some conditions may be excluded. To get the most out of your coverage, check the exclusions in your Service Agreement, which will tell you what is and isn’t covered. This information is essential in determining which home warranty provider is best for your needs.

Most home warranties include a list of specific items that aren’t covered. For example, plumbing repairs are not generally covered. In addition, you may have to pay for repairs on electrical systems and appliances. Some home warranties exclude parts and devices such as circuit boxes and sprinklers. Before signing up for a home warranty, read the fine print and speak with a representative to understand the exact coverage.

Waiting Period

home warranty in Arizona usually comes with a waiting period. This period is supposed to ensure that your systems and appliances haven’t failed due to normal wear and tear or old age. This period is usually one to 30 days. However, it can vary depending on the company. Some warranties have no waiting period, but others have a waiting period of a few days.

One exception to the waiting period is when you purchase a home warranty plan after closing. If you bought a home warranty plan from a seller, it usually comes with a 30-day grace period. However, if you purchased the plan from your agent, you don’t have to worry about the 30-day waiting period because you can use it as soon as you close your deal.


Home warranty limits apply to loss and claim costs and help keep costs down for average homeowners. They also help home warranty companies better manage claims. However, each claim and service event is different. As a result, limits will vary by the home warranty provider. Some home warranties offer higher limits than others.

Home warranty contracts specify the maximum payouts per covered item and warranty period. Often, these payouts are as low as $2,000 per covered item, but some companies cap their payouts to as much as $15,000 per covered item. Also, some home warranty contracts may limit coverage to specific appliances or parts. For instance, if an air conditioner stops working, you won’t be covered for repairs to that item.


Home warranties can provide valuable protection for your home, but the cost of one varies widely. A single year’s coverage can cost between $350 and $825. Some companies offer a one-time fee that covers the entire year, while others charge a flat fee per claim. Whether you choose monthly payments or a yearly plan, the home warranty cost will likely depend on several factors.

Most home warranty policies require a premium for service calls. You’ll pay this monthly for the duration of the contract, and you’ll also pay a service call fee when you call for help. Some plans include additional coverage for electronics, swimming pools, and spas. Some even cover septic systems.

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