Myth: A Home Warranty Covers Everything That Breaks

This one comes up after closing more than before it. A buyer gets a home warranty with the purchase, something breaks a few months later, and the claim comes back denied. The reaction is usually some version of "I thought this was covered." Here is the plain version of what a home warranty is and what it is not.

A home warranty is a service contract. It is not homeowners insurance, and it is not a promise that the house works. For an annual fee, the company agrees to repair or replace specific systems and appliances when they fail from normal use. The key word is specific. Every plan has a covered list, and if an item is not on that list, it is not covered. Base plans commonly include heating and cooling, the water heater, plumbing, electrical, and major kitchen appliances. The roof, pool equipment, septic, and extra appliances are often add-ons or not offered. Your contract is the only list that counts.

Then read the exclusions. Most contracts do not cover pre-existing conditions, failures caused by lack of maintenance, improper installation, or code violations. If a system was already limping on the day coverage started, the company can decline the claim. This is where your inspection report matters. If the inspector flagged an aging air conditioner or a water heater past its expected life, do not assume the warranty will replace it. Ask the warranty company in writing before you count on it.

Then the mechanics. Each claim typically carries a service fee paid to the contractor the company sends. You do not pick the contractor. Many plans cap what they pay per item or per year. The caps and fees are in the contract, not the brochure.

What trips people up is treating the warranty as a reason to skip the inspection or to accept a tired system without negotiating. It is neither. A warranty is a reasonable backstop for the unknowns. It is not a substitute for knowing what you are buying.

If a seller offers a warranty, ask which company and plan, and read the covered list and caps. If you buy your own, compare covered lists, exclusions, fees, and caps across a few providers. Questions about what a contract obligates anyone to do belong with an attorney.

A home warranty earns its keep when you know exactly what it covers. Read it like a contract, because it is one.

This is general information, not legal or tax advice.

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Jon Hegreness, REALTOR / Associate Broker, Howe Realty
(623) 826-0888 / JonHegreness@gmail.com / License BR540940000
9059 W Lake Pleasant Pkwy, B-200, Peoria, AZ 85382
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