home warranty

What is a Home Warranty?

Buying a home is usually a very rewarding experience. A space all your own, decorating, and increased property equity are some of the benefits of homeownership. However, if unexpected property issues happen to occur, a home warranty might provide a sufficient amount of coverage for repairing or replacing certain items.

About Home Warranties

Similar to the peace of mind that an insurance policy provides, a home warranty policy is used to pay for property damage or appliances that stop working. Unlike a homeowner's insurance policy, items that are covered by a home warranty will expire at various times. The actual items that are covered will vary among home warranty companies. but here are some of the items that are typically covered with a home warranty:

  • Dishwasher
  • Refrigerator
  • Washer
  • Dryer
  • Garbage disposal
  • Sump pump
  • Heat pump
  • Furnace
  • Air conditioner
  • Plumbing
  • Ceiling fans

Home Warranty for a Brand New Home 

When purchasing a brand new home, a buyer may expect that every item in the home will work for many years. However, the costs to address insufficient workmanship or a defective appliance might be beyond a buyer’s expectations. With a valid home warranty, a homeowner can seek to replace damaged items with a minimal deductible.

Newly constructed homes often include a warranty plan from the builder. Generally, the property builder will issue a home warranty to the buyer that covers structural damages, plumbing, electrical items, drywall, heating systems, air conditioning systems, and other items. Structural damage is generally covered by a 10-year home warranty policy. Appliances and other items are usually only covered for up to one year. Home warranties for brand new properties will vary among builders.

Home Warranty for an Existing Home

We all fear buying a home and then having it fall apart shortly after moving in. After investing thousands of dollars in the purchase of a home, many buyers worry that additional expenditures will arise. 

While the purchase of a home warranty for an existing property is a justifiable expense, it’s also an optional item. Some buyers may need to use the majority of their available funds toward the down payment of a home and other required items. However, a home warranty is an investment that provides a hedge against unforeseeable damages. 
To increase the attractiveness of a property listing, some home sellers or real estate agents may include a home warranty with the purchase of an existing property.

Home Warranty Costs

Generally, the price of a home warranty contract will range between $300 and $500. Typically, to exercise the coverage toward a repair or a replacement, a property owner would be required to pay a nominal fee between $75 and $100 per incident. 


Whether purchasing a newly constructed home or an existing property, a home warranty plan is a wise investment for a prospective buyer. If needed, the simplest home warranty package could provide thousands of dollars in repair or replacement costs.

Last Updated: May 15, 2017