Home Warranty

What Is a Home Warranty?

A home warranty is a service contract covering repair or replacement of certain home systems and appliances.

Coverage may include:

• HVAC systems
• Plumbing
• Electrical systems
• Major appliances

It differs from homeowners insurance.

Why It Matters in a Mortgage

Home warranties can:

• Reduce repair cost uncertainty
• Provide added buyer confidence
• Be negotiated as part of sale agreement

They are optional and separate from lender requirements.

How It Works

1. Homeowner purchases warranty plan.
2. Pays annual premium and service fees.
3. Claims are submitted when covered systems fail.

Coverage limitations apply.

Home Warranty vs. Homeowners Insurance

Home Warranty → Covers mechanical breakdown
Homeowners Insurance → Covers damage from events like fire or storms

They serve different protection roles.

FAQs About Home Warranties

Are home warranties required?
They are optional service contracts.

Do they cover all repairs?
Coverage depends on policy terms and exclusions.

Are warranties transferable?
Some policies allow transfer during sale.

Related Terms

• Homeowners Insurance
• Purchase Agreement
• Closing Costs
• Mortgage
• Property Maintenance

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