A home warranty is a contract between a homeowner and a home warranty company that provides for discounted repair and replacement service on a homes major components, such as the furnace, HVAC, plumbing, and electrical systems. It may also cover major appliances, such as washers and dryers, refrigerators, and swimming pools. Unlike homeowners insurance, which covers major perils such as fires, hail, property crimes, and certain types of water damage that could affect the entire structure or the homeowner’s personal possessions, a home warranty covers general wear and tear.

When you purchase a home, even a home that isn’t new, there is a very good chance that you will be offered a home warranty as a safety net against expensive, unforeseen repairs. The warranty company connects you with its affiliated contractors, so you can make one call for any problems with an appliance or system thats covered by your plan and dont need to find individual contractors on your own. A home warranty is a consumer convenience product that you can purchase to mitigate the risk of incurring major out-of-pocket expenses if an appliance or system fails.

It is important to note that a home warranty is not the same thing as homeowners insurance, which covers different things. Homeowners insurance covers property damage from perils such as fire, theft, hail, wind, and vandalism. It also covers liability for injuries to guests on an insured’s property. A home warranty, on the other hand, covers appliances and systems that malfunction and arent covered by home insurance or a manufacturers warranty.

In general, a home warranty is a contract covering repairs and replacements on systems and appliances in your home, usually for a period of one year. It provides a financial buffer in case a big-ticket item malfunctions, and it can extend the protection of manufacturers’ warranties after they expire.