A home warranty is a service contract covering repair or replacement of major home appliances and systems, unlike homeowners insurance which protects against sudden events.
Most plans cover refrigerators, ovens, dishwashers, water heaters, heating, air conditioning, electrical, and plumbing systems. Coverage varies significantly between providers.
Annual costs range from $400-$700 for basic plans, with service call fees of $50-$150 per visit.
Financial predictability, reduced stress during emergencies, and peace of mind for new homebuyers. Warranty companies dispatch pre-vetted technicians.
Service call limits, long wait times, claims denials, and being restricted to the warranty company's contractor network.
Home warranties make sense with older appliances, limited emergency savings, or uncertainty about system conditions. They may be unnecessary for newer homes with manufacturer warranties still in effect.
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