home warranty
What Does a Home Warranty Cover?
Home warranty coverage varies, but there are some standard coverages for appliances and systems you can expect from most home warranty companies. Here are some examples of what a home warranty may cover:
– Heating, ventilation, and air conditioning (HVAC) systems
– Plumbing systems
– Electrical systems
– Kitchen appliances, such as refrigerators, ovens, and dishwashers
– Laundry appliances, such as washers and dryers
– Garage door openers
– Ceiling fans
– Jetted bathtub motors and pumps
– Limited roof or pest control coverage
– Rekeying service
It’s important to note that coverage varies between home warranty providers, and some plans may offer more comprehensive coverage than others. Additionally, there are some common equipment malfunctions that providers almost always disqualify under home warranty coverage, such as cosmetic issues or damage caused by improper installation or maintenance.
Average Home Warranty Costs
The cost of a home warranty typically ranges from $300 to $700 per year, with monthly premiums averaging between $25 and $60. However, prices can vary significantly based on several factors:
– **Coverage level**: Basic plans covering essential systems and appliances cost less than comprehensive plans.
– **Home size and location**: Larger homes or those in areas with higher repair costs may face higher premiums.
– **Provider**: Different companies offer varying pricing structures and coverage options.
Cost Breakdown
Monthly Premiums
– Average monthly premium: $57.83
– Typical range: $25 to $60 per month
– Lowest observed: $19.99 per month
– Highest observed: $119.90 per month
Annual Costs
– Average annual cost: $693.96
– Typical range: $300 to $700 per year
– Basic plans: Around $543.60 annually
– Comprehensive plans: Up to $840.20 annually
Service Fees
In addition to premiums, homeowners pay a service fee (or deductible) when filing a claim:
– Typical range: $50 to $125 per service call
– Average: $75 to $100
Factors Affecting Costs
**Coverage type**: Systems-only, appliances-only, or combination plans
**Add-ons**: Optional coverage for items like pools or roof leaks
**Service fee amount**: Higher fees often result in lower monthly premiums
**Home age and condition**: Older homes may have higher premiums
**State regulations**: Costs can vary by state due to different regulations
Home warranties and homeowners insurance are two distinct types of protection for homeowners, each serving different purposes and covering different aspects of home ownership.
Home Warranty
A home warranty is a service contract that covers repairing or replacing major home systems and appliances due to normal wear and tear.
**Coverage includes:**
– Major appliances (e.g., refrigerators, washers, dryers)
– Home systems (e.g., HVAC, plumbing, electrical)
– Optional add-ons (e.g., pools, spa equipment)
**Key features:**
– Typically lasts for 12 months
– Average cost: $300 to $700 per year
– Service fee: $50 to $125 per claim
– Not required by mortgage lenders
Homeowners Insurance
Homeowners insurance protects against sudden and accidental damage to the home’s structure and personal belongings, as well as providing liability coverage.
**Coverage includes:**
– Home structure
– Personal property
– Liability protection
– Additional living expenses
**Key features:**
– Annual policy, often required by mortgage lenders
– Covers specific perils (e.g., fire, theft, storms)
– Premiums vary based on home value, location, and risk factors
– Deductibles apply to claims
Main Differences
**Purpose:**
– Home warranty: Covers repair/replacement of systems and appliances due to normal wear and tear
– Homeowners insurance: Protects against sudden, accidental damage and liability
**Coverage trigger:**
– Home warranty: Malfunction or breakdown from regular use
– Homeowners insurance: Specific covered perils (e.g., fire, theft)
**Claim process:**
– Home warranty: Request service, contractor assesses and repairs/replaces
– Homeowners insurance: File claim, adjuster evaluates, payout processed if approved
**Requirement:**
– Home warranty: Optional
– Homeowners insurance: Often required by mortgage lenders
**Cost structure:**
– Home warranty: Annual premium plus service fees
– Homeowners insurance: Annual premium plus deductibles
While both offer protection, a home warranty complements homeowners insurance by covering issues not typically included in insurance policies, such as appliance breakdowns due to age.
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Blake Insurance Group
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Email: [email protected]
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Blake Nwosu
Owner & Principal Agent