What Is A Home Warranty And How Much Does It Cost?

When you own a home, you’re financially responsible when something breaks. One way to protect your wallet is to purchase a home warranty.

We’ll share everything you need to know about home warranties, including how they work and whether the cost of a home warranty is worth paying.

What Is A Home Warranty?

A home warranty is an annual contract that covers the repair or replacement of major appliances and home systems. A service contract can pay for critical home systems, like HVAC, plumbing and electrical, and covers specific home appliances, like water heaters, garbage disposals, washers and dryers.

Home Warranty Vs. Home Insurance

While a home warranty might sound like a homeowners insurance policy, it’s a different type of coverage. Home insurance covers damage to a house’s structure, protects your belongings in case of theft or loss and can cover the expense if someone gets injured on your property. A home warranty covers the replacement or repair of indoor appliances and systems due to normal wear and tear or manufacturing defects.

How Does A Home Warranty Work?

You must follow a set process to submit a claim with your home warranty service provider. If a covered appliance or system breaks down, here’s what you should do:

1. File a service request claim: Contact the home warranty company to alert them to the issue. Tell them whichappliance(s) or system isn’t working and provide the unit’s manufacturer.
2. Schedule an appointment: The home warranty company will select a third-party service provider in their partner network to contact you. Some companies even allow you to choose your service provider.
3. Repair or replace the appliance or system: The service provider will come to your home to diagnose the problem. The home warranty company will either pay for repairs (parts and labor) or the replacement of the item.
4. Pay your trade call fee: This service fee operates like a deductible for your home warranty policy. You pay it eachtime you file a claim. If the repair costs less than the fee, you’ll only pay the repair cost.

What Does A Home Warranty Cover?

Home warrant