The line between the two
Your homeowners policy is built around sudden, accidental damage. A hailstorm takes the roof, a pipe bursts, a tree comes through the window. What it deliberately does not cover is age. A twelve-year-old water heater that finally gives up has not been damaged — it has simply reached the end, and every homeowners policy in the country excludes that.
A home warranty is a service contract that picks up exactly there: the systems and appliances that break down through normal use.
What that usually means in practice
Heating and cooling, water heaters, electrical and plumbing systems, and the major appliances — the things that are expensive, unglamorous, and always fail at the worst time of year.
How it works is different from a claim, too. You call the warranty company, they send an approved contractor, and you pay a set service fee per visit rather than a deductible. Contracts run annually.
When it earns its keep, and when it does not
It tends to be worth most on an older home, on a house you have just bought where the age of everything is a mystery, or for anyone who would rather pay a predictable annual figure than face an unpredictable four-figure one.
It is worth least on a new build still under builder warranty, or where the major systems have all been recently replaced.
Every contract has its own list of what is covered, what is excluded, and what the caps are, and those lists differ more than people expect. Reading it before you need it is the whole exercise — which is a conversation, not a web page.
Also written here
- Heating and cooling systems
- Water heaters
- Electrical and plumbing
- Kitchen and laundry appliances
- Coverage for a home you are about to buy