How do they work?
If a home system or appliance breaks down or stops working, you call the home warranty company. Your home warranty company will call a service provider that it has a business arrangement with. The service provider will call you to make an appointment at which time the service provider will fix the problem. If an appliance or system is malfunctioning and can’t be repaired, depending on your contract coverage, your home warranty company will pay to replace and install the appliance. Typically you will pay a small trade service fee (usually less than $100). Keep in mind that a home warranty is different than your homeowners insurance. One example to demonstrate the difference is if your dishwasher malfunctions and floods the kitchen. In this example your home warranty would cover the replacement or repair of your dishwasher but your homeowners insurance will cover the damage from the flooding.
What’s not covered? Check your specific policy, but in general:
Outdoor items such as sprinklers
Spas and pools, unless specific coverage requested
What can cause denial of a claim?
Unusual wear and tear
General coverage includes:
Inside plumbing stoppages
Range and oven
Your responsibility is to read thoroughly and understand your warranty before you agree to the terms. Be sure to clear up anything you don’t understand before you sign anything. Keep in mind that home warranties are not a substitute for your homeowners insurance, but are meant to provide some additional coverage. Also, always contact your home warranty provider prior to calling a company to provide any service or repair because most home warranty companies will require you to use one of their preferred vendors. I have several resources for Home Warranty Providers and would be happy to put you in touch with one of my referrals.