What Is a Home Warranty and Do You Need One? Pt. I of II | APHW Skip to main content

What Is a Home Warranty and Do You Need One? Pt. I of II

Black man on the left and Black woman on the right (both wearing red shirts) with a black boy in a blue shirt in the middle with his hands and mouth positioned to suggest, "I don't know."

If you’re reading an article about home warranties, there’s a good chance you either own a home and are considering getting a home warranty, or your home came with one and you want to learn more about it. The great news is that no matter which situation you’re in, you’ve found the right place!

Here you’ll find general information that can help you decide if buying a home warranty is a smart choice, and how a home warranty can help you as a homeowner.

What is a home warranty?

A home warranty is a service contract that helps pay for the costs of repairing or replacing covered items if they break down from normal wear and tear. Similar to insurance, home warranties can charge monthly or yearly premiums, and offer coverage in return.

What does a home warranty cover?

What’s covered in a home warranty service contract depends on the home warranty provider you choose. Most home warranty companies provide coverage for your most critical home systems and appliances, such as your oven, water heater, fridge, plumbing, and more. How far this coverage extends for each item will be written in your contract, so you’ll want to review the contract before buying the home warranty to see what is covered and know if it’s right for you.

Something else you’ll want to know about home warranties is that there may be payout limits for each covered item. There might also be a payout limit for each coverage period, which is the start and end date of your home warranty service contract. In addition to reading the contract thoroughly, you can count on your provider’s customer service team to walk you through anything you don’t understand.

What does a home warranty cost?

According to HomeAdvisor, a home warranty premium can cost anywhere from $219 to $1,719 a year. The website also lists the average cost of a home warranty at $964 annually.

In addition to a premium, there may be a deductible associated with a service call after you make a claim on a covered item. This deductible amount can vary from provider to provider, and may change depending on the amount of coverage you need.

How does a home warranty work?

Homeowners should contact their home warranty company to make a claim whenever a covered item breaks down. Once you’ve made a claim, many home warranty companies will send a licensed technician to diagnose the problem and determine the cost of fixing it. If the cost of repairs is more than the item is worth, your home warranty company may help you with the costs of replacing the broken system or appliance.

Most home warranty companies have a list of approved, licensed technicians that take care of service calls. America’s Preferred Home Warranty is the only major home warranty provider where you can choose ANY licensed contractor. This ensures you have a technician you know and trust to handle covered repairs. Plus, because the licensed contractor works for you and not the warranty company, you have more control over the process.

Once the issue is diagnosed, the home warranty company will determine if the repair or replacement meets your contract’s requirements, and your provider will guide you through the rest of the process to help you get things back to normal.

Don't miss out on the rest of the story - Part II: Do You Need a Home Warranty?

Ready to learn more about home warranties? Please visit the home warranties section of our website. You can also speak to our award-winning customer service team at 866.589.5767 for more help and information.

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