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What is a home warranty?

Your home warranty policy and what it includes

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Buying a home can come with many new responsibilities like yard work and repairs. If you’re not able to do repair work on your own, the cost of upkeep can add up fast. A home warranty is one way to help manage the cost of major home repairs and replacements.

What does a home warranty cover?

A home warranty covers the cost of repair services if some appliances or systems in your home break. This can include:

  • Heating, ventilation, and air conditioning system (HVAC)
  • Electrical system
  • Water heaters and plumbing
  • Dishwasher
  • Refrigerator
  • Garage door opener
  • Garbage disposal
  • Oven/stove

Depending on the age of some of your items, there may be overlap between the manufacturers’ warranty and the home warranty coverage. Home warranties do not typically cover structural issues like the roof, foundation, walls and flooring, or other pre-existing conditions that include normal wear and tear. Be sure to read through the coverage thoroughly so you know what you’re paying for. You can purchase a home warranty at any time, no matter how old your home is or the condition it’s in.

What is a home warranty for a buyer?

New homeowners might choose to buy a home warranty when they first buy a home to protect their investment and cut down on costs should a problem arise. A home warranty can also help cut down on unexpected expenses right after moving that weren’t initially a part of your budget.

What is a home warranty for a seller?

Some sellers choose to purchase a home warranty in case something breaks before the house is sold. Sellers' warranties are typically limited as they are specifically designed to cover the seller until closing of the sale is complete. This limitation may only cover more expensive repairs and can help maintain a home’s condition while it’s still the seller’s responsibility. Other times, sellers will purchase a home warranty to sweeten a deal with a potential buyer.

What is the duration of a home warranty’s coverage?

Generally, you can buy a home warranty on a monthly or annual contract. The coverage included in the warranty varies by company. Pricing also varies and can range from $25 to $100 per month. This may or may not include fees for service visits and some companies have price limits on specific covered items.

Home warranty vs. homeowners insurance

Homeowners insurance is meant to provide financial protection in the case of damage to your home caused by a fire, tornado, vandalism, or other "known perils." Certain homeowners insurance policies will also cover injuries to people on your property. Home warranties cover repairs for items that have natural wear and tear after use. Usually there is no overlap between a home warranty and homeowners insurance; however, having both types of coverage may give a homeowner better peace of mind.

Consider a home warranty with a Freedom Mortgage partner

Freedom Mortgage has teamed with Cinch Home Services to offer home warranties to current Freedom Mortgage customers. Visit our Cinch home warranty page to learn more!

Last reviewed and updated September 2022 by Freedom Mortgage Corporation.

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