Is a Home Warranty Program right for me

Traditionally, home warranty insurance was a product offered by a seller who wished to gain an extra edge over his competition. In recent years, however, home buyers and even home owners in general realized that there was no legal obstacle to them obtaining this valuable product for themselves. As a result, such policies have spread beyond their original, rather small, niche in the market and have taken on greater relevance to homeowners in general as opposed to home sellers or home buyers.

Home warranty insurance is a guarantee by the policy issuer that the homeowner will be protected against unanticipated failures in the basic operating systems of the house. Just as in other lines of insurance, a home warranty insurance policy can be as extensive or as narrowly focused as the purchaser needs it to be. The most typical set of coverage endorsements is designed to shield the homeowner from repair expenses to the home’s heating system, its water heater, and its air conditioning plant. In addition, this coverage also extends to the home’s electrical, plumbing and alert systems such as door bells and smoke detectors.

On top of these basic environmental components, the typical home warranty also covers the installed appliances such as laundry room appliances including the washer and dryer; kitchen appliances including the stove, refrigerator, microwave, disposal and dishwasher; and other appliances and fixtures installed in other rooms of the house such as toilets, bath and sink faucets and drains; plus all other miscellaneous units such as ceiling fans and central vacuum cleaners. 

In short, the idea is to provide coverage for any system that is considered to be essential to the function and comfort of the house, and would be generally expected to be part of the inventory of any reasonably equipped home. The one exception is the home’s phone and cable/satellite television systems since these systems usually come with their own individual warranty provisions from the service providers.

There are, of course, a number of items that are usually not included in a home warranty policy. As alluded to above, phone and television systems are generally excluded in toto. For those homes built in more rural locations, well and septic systems are generally excluded from the policy unless specifically added as an optional coverage endorsement. Water softener systems are not typically covered except as an option. The same goes for pools and built-in spa and hot tub systems. These all require specific addition to the basic policy. Freestanding hot tubs are not included in any form of coverage.

Finally, there is a list of exceptions which are not covered or will cause covered items to be excluded from being covered. Neglected routine maintenance procedures can void coverage on many items. Radon monitoring systems are not covered. Solar installations are not subject to coverage. As can be seen, there is actually a rather small list of things that are not available for inclusion in home warranties.

The only significant item on the list is that of a solar installation, but these units are generally covered by manufacturer’s warranties anyhow. Naturally, every home has a slightly different list of items that are available for coverage or exclusion. The base policy is designed to provide protection for the most typical set of home features, while the optional provisions pick up the slack for those exceptions which occur to every rule. Taken as a whole, however, home warranty insurance coverage represents a very solid and complete level of protection against what past experience has shown to be the most important risks of failure.