What Is a Home Warranty?

Your Home Warranty Policy and What It Includes

Buying a home can come with many new responsibilities, like yard work and repairs. If you’re not able to do repair work on your own, the cost of upkeep can add up fast. A home warranty is one way to help manage the cost of major home repairs and replacements.

What Does a Home Warranty Cover?

A home warranty covers the cost of repair services if some appliances or systems in your home break. This can include:

• Heating, ventilation, and your air conditioning system (HVAC)
• Electrical system
• Water heaters and plumbing
• Dishwasher
• Refrigerator
• Garage door opener
• Garbage disposal
• Oven or stove

Depending on the age of some of your items, there may be an overlap between the manufacturer's warranty and your home warranty coverage. Home warranties do not typically cover structural issues like the roof, foundation, walls, flooring, or other pre-existing conditions that include normal wear and tear. Be sure to read through your coverage policy thoroughly so you know what you’re paying for. You can purchase a home warranty at any time, no matter how old your home is or the condition it’s in. As part of Freedom +, Cinch Home Services offers home warranty coverage to help protect your budget from costly repairs and replacements.

What Is a Home Warranty for a Buyer?

New homeowners might choose to buy a home warranty when they first purchase a home to protect their investment and cut down on costs in case a problem arises. A home warranty can also help cut down on unexpected expenses right after moving that weren’t initially part of your budget.

What Is a Home Warranty for a Seller?

Some sellers choose to purchase a home warranty in case something breaks before the house is sold. Seller's warranties are typically limited, as they are specifically designed to cover the seller until the closing of the sale has been completed. This limitation may only cover more expensive repairs and can help maintain a home’s condition while it’s still the seller’s responsibility. Other times, sellers will purchase a home warranty to sweeten the deal with a potential buyer.

What Is the Duration of a Home Warranty’s Coverage?

Generally, you can buy a home warranty on a monthly or annual contract. The coverage included in the warranty varies by company. According to Forbes, home warranties can cost around $600 per year and pricing can range from $275-$1,425 a year. This may or may not include fees for service visits, and some companies have price limits on specific items that are covered.

Home Warranty Versus Homeowners Insurance

Homeowners insurance is meant to provide financial protection in case of damage to your home caused by a fire, tornado, vandalism, or other "known perils." Certain homeowners insurance policies will also cover injuries to people on your property. Home warranties cover repairs for items that have natural wear and tear after use. Usually, there is no overlap between a home warranty and homeowners insurance. However, having both types of coverage may give a homeowner better peace of mind.

Consider a Home Warranty with Cinch Home Services*

At Freedom Mortgage, we're all about making homeownership easier. As part of the Freedom + program, Cinch Home Service has plans to keep your home and budget protected. Get an online quote today and find the plan that's right for you.* Visit the Cinch home warranty page to learn more!

Last reviewed and updated July 2024 by Freedom Mortgage.

*The HomeSure Companies and Cinch Home Services, Inc. are not affiliated in any way with Freedom Mortgage Corporation, its affiliates, or subsidiaries. Freedom Mortgage Corporation does not sponsor, guarantee nor is it responsible for the entities, agents, contractors, services, products or plans offered by the HomeSure Companies and Cinch Home Service, Inc. Freedom Mortgage Corporation has an agreement with Cinch Home Services to make you aware of products and services that may be of interest and will be compensated in connection with this program. The purchase of home warranty products is optional and is not an obligation of your mortgage loan documents. You are not obligated by the terms of your mortgage loan documents to purchase any of the home warranty products, and the payment obligation for any such home warranty product will not be secured by your home.