A: A home warranty policy is a type of insurance policy that protects the owner from unexpected repairs to various systems in the home. This coverage is different than a conventional homeowner’s fire and hazard policy. Components that are typically covered in a home warranty include kitchen appliances, water heaters, heating and ductwork, garage door openers and ceiling fans. The home warranty does not cover pre-existing conditions or systems that have not been properly maintained.
There are advantages of getting a home warranty, especially on an older property. Murphy’s Law applies and home systems will eventually break down due to normal use. For the cost of a diagnostic house call, around $75, the problem could be fixed.
Newly constructed homes are not immune from defects and malfunctions. However, if new appliances are covered by a manufacturer warranty that is transferable to the new owner, it doesn’t make sense to add them to a home warranty policy. Also, don’t bother buying a home warranty on a fixer-upper that will be substantially renovated.