It is not always clear what a home warranty does and does not cover — even to experienced homeowners. In these times of uncertainty, a home buyer may turn to their insurance agent for guidance on how a home warranty works and how it differs from homeowners insurance. The short answer for anyone considering a home warranty: Home warranties and home insurance are not the same. Homeowners insurance protects the structure of a home and its contents. Warranties, on the other hand, cover appliances and systems including repairs to a furnace, hot water heater or electrical system, says the real estate company RE/MAX. For example, damages that occur as a result of theft or fire would not be covered by a home warranty but would likely be covered under a home insurance policy. Click through the slideshow above for the key things insurance agents and insureds should know about home warranties, according to RE/MAX.

Home warranty basics

While most individuals who choose to purchase a home warranty do so before or soon after closing on their new home, homeowners can buy a warranty at any time, even years after moving in. According to QuickenLoans, a home warranty is an annual service contract that generally lasts a year or two, with the option to cancel or renew after the policy term. For systems and appliances to be covered under warranty, most companies require that they be on a regular maintenance schedule. Other conditions, such as home inspections or service call fees for repairs may also apply under some home warranties, depending on the company. Related: 

 

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Heather A. Turner

Heather A. Turner is the managing editor of ALM's NU Property & Casualty Group. She can be reached at [email protected].

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