What Is a Home Warranty?

A home warranty is a service contract, normally for one year and usually renewable, which helps protect home owners against the cost of unexpected covered repairs or replacement on their major systems and appliances that break down due to normal wear and tear. Coverage is for systems and appliances in good working order at the start of the contract.

What most people don't know is that you can purchase a home warranty just like you would purchase any insurance policy... you don't need to have purchased one or received one at the time your purchased your property (sometimes a seller will provide a warranty; some lenders provide a warranty if you are approved for a mortgage from their institution). Choosing the right warranty company involves research. This is an excellent place to start: http://www.homewarrantyreviews.com/

Check your home warranty policy to see which of the following items are covered. Also find out if the policy covers the full replacement cost of an item.

Plumbing
Electrical systems
Furnace
Water heater
Heating ducts
Water pump
Dishwasher
Garbage disposal
Stove/cooktop/ovens
Microwave
Refrigerator
Washer/dryer
Swimming pool (may be optional)

Source: American Home Shield, http://www.ahswarranty.com/, REALTOR® Benefits Partner