What Does a Home Warranty Cover? Systems, Appliances and Add-Ons Explained

A home warranty is a service contract that pays to repair or replace home systems and appliances that stop working from normal wear and aging — but only the items your specific plan lists, and only within the contract's caps, exclusions and conditions.

What "covered" really means

An item appearing on a plan is only the first test. Three things have to line up before a repair is covered:

• The item is listed in your plan — a system, an appliance, or an add-on you paid for.
• It failed from normal use and aging, not from a cause the contract excludes.
• The repair or replacement falls inside the contract's limits and follow-up rules.

Even a listed item can leave you paying. Providers usually cover the mechanical part, not the damage around it: a covered water heater may not include the water damage it caused, a covered refrigerator may exclude the food inside or a separate ice maker, and a covered HVAC system may leave out the refrigerant recharge, the ductwork, or a code upgrade a new part requires.

The three building blocks

Nearly every provider builds plans from the same pieces: systems, appliances and optional extras.

Systems plans

Systems coverage focuses on the parts of your home you can't easily see: heating, air conditioning, ductwork, plumbing lines, electrical wiring and panels, and usually the water heater. These are often the most expensive repairs a household faces.

Appliance plans

Appliance coverage typically includes the refrigerator, oven or range, cooktop, dishwasher, built-in microwave, garbage disposal, and clothes washer and dryer.

Combination plans

Combination plans bundle systems and appliances together. They cost more than either plan alone, but suit homeowners who want a single contract — and a single number to call — for most of the house.

Common add-ons

• Pool and spa equipment
• Septic systems and well pumps
• Sump pumps
• A second refrigerator or standalone freezer
• Limited roof leak repair

The fine print that matters

Whether a repair is covered turns on the fine print more than the marketing page. Read for four things: coverage caps (the most a provider will pay per item and per year), exclusions (pre-existing conditions, lack of maintenance, improper installation, and permits or code upgrades), and how the provider settles an item it can't repair — some repair it, some replace it, and some pay only a set cash amount toward a replacement. Our FAQ on coverage walks through each of these.

A quick read-before-you-buy checklist

Before you choose, put two or three sample contracts side by side and check each one off:

• Which systems and appliances are listed, and which add-ons cost extra?
• What is the per-item cap and the annual aggregate cap?
• Which failures are excluded, and does the contract repair an item, replace it, or pay a fixed cash amount?
• Is the provider licensed or registered in your state? Our state-by-state regulation guide shows where to check.

Once you know what you want covered, you can see which companies serve your area and what they charge by entering your ZIP.