Home warranty how does it work

Homeowners sign a service contract, typically for one year, with a home warranty company for the level of coverage they want and follow the process below to have a covered appliance or system repaired or replaced when it breaks down from normal use. Home warranties provide coverage for repair and replacement of systems and appliances that stop working in the course of regular use, while homeowners insurance covers damage to or loss of these items as a result of events including lightning, fire and theft.

Home warranties are optional for homeowners, while homeowners insurance is generally required if the homeowner has a mortgage. Having both homeowners insurance and a home warranty gives you a greater degree of financial security and coverage for your home.

Sellers can also purchase a seller's warranty so repair costs are covered during the listing and closing process. For more information, read about the differences in home warranties for buyers and sellers. Home warranties are not for everyone, so be wary of sales associates or real estate agents who try to push a policy on you by claiming that all buyers need one. That said, if you have legitimate concerns about the longevity of essential home systems and appliances, a home warranty could end up saving you big bucks down the road.

As a member of the ConsumerAffairs research team, Jessica Render is dedicated to providing well-researched, valuable content designed to help consumers make informed purchase decisions they can feel confident making.

She holds a degree in journalism from Oral Roberts University. Personal Finance. Your Practice. Popular Courses. Part Of. Homeowners Insurance Basics. Know Your Terms.

What's Covered. Best Home Insurance Companies. Insurance for Natural Disasters. Insurance for Special Situations. Home Warranties. Home Ownership Purchasing A Home. Table of Contents Expand. What Is a Home Warranty? What Does a Home Warranty Cost? The Benefits of a Home Warranty. The Drawbacks of Home Warranties. The Bottom Line. Key Takeaways A home warranty reassures a homebuyer and provides the seller with a measure of protection against complaints about home defects that arise after the sale closes.

The homeowner may have little or no say in the model or brand of a replacement component, or may not like the job the company-designated contractor does. Rather than get a home warranty, it may make more sense to put premium payments into an emergency fund to use for any repairs that do come up. Related Articles.

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Take a look at our home warranty education articles here. Everything you need to know about what a home warranty is, how it works and what it covers. Real estate professionals: use these articles to help your clients! Don't miss out on our monthly newsletter! Sign up to get tips on everything about home ownership, from maintenance tips to home selling advice delivered to your email once a month. Input your information and get a free, personalized home warranty quote.

You can customize the coverage and pricing to fit your needs. Experience what over 70, homeowners already know: A Landmark Home Warranty helps provide protection for your home and budget! Get A Free Quote!