What Is A Home Warranty And How Do Home Warranties Work?

Home warranties cover repair or replacement costs for home appliances and systems due to normal wear and tear, offering predictable expenses and peace of mind. They require annual premiums plus service fees per claim, with coverage limits and exclusions. Warranties typically cover appliances, HVAC, plumbing, and electrical systems but exclude preexisting conditions, negligence, and some components. They differ from homeowners insurance, which covers catastrophic damage. Home warranties suit older homes or first-time buyers but may not always be cost-effective.