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Decoding the Terms of Your Home Warranty Contract: A Guide for New Homeowners

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Congratulations, new homeowners! As you step into the thrilling phase of owning your home, you'll come across something known as a 'Home Warranty Contract.' This essential document plays an instrumental role in protecting the vital systems and appliances within your new home. While the language may seem technical at first glance, fear not. We're here to translate these complex phrases into a user-friendly guide. 

Let's dive in to help you understand the language of home warranty contracts better:

  1. Home Warranty: A home warranty is a service contract that typically lasts for a year and covers the repair or replacement costs of home systems and appliances that break down due to normal wear and tear. It is different from home insurance, which covers damage from specific events like fires, theft, or natural disasters.
  2. Covered Items: These are the specific home systems and appliances the warranty plan covers. They typically include heating and cooling systems, plumbing, electrical, and major appliances like refrigerators, washers, and dryers. It's crucial to note that not all items in your home are covered, and there may be different levels of coverage, so carefully review the list of covered items in your contract.
  3. Service Call Fee or Deductible: This is a fee you pay each time you request a service. This amount can vary based on the warranty provider and the specific plan you choose. You pay this fee even if the item can't be repaired and needs to be replaced.
  4. Exclusions and Limitations: A home warranty won't cover everything. Each plan comes with a list of exclusions—items or circumstances not covered. For example, a contract might exclude outdoor items, pre-existing conditions, or repairs due to improper installation or maintenance. Limitations are the caps or maximum amounts the warranty provider will pay for repairs or replacements.
  5. Claim: A claim is a formal request you make to your home warranty company when a covered system or appliance breaks down. To file a claim, you'll generally call the warranty company or fill out a form on their website. They then send a service technician to your home to assess the situation.
  6. Pre-Existing Conditions: These are problems with systems or appliances that existed before the warranty coverage began. Most home warranty contracts do not cover pre-existing conditions, particularly if the problem was known or should have been known during the home inspection.
  7. Waiting Period: This is a specified amount of time you must wait after purchasing the warranty before you can make a claim. Waiting periods are typically 30 days but can vary by provider.
  8. Renewal: When your contract term (typically a year) is about to end, you can choose to renew your home warranty. Some companies offer automatic renewal while others require you to manually renew your plan.

Understanding the terms of your home warranty contract can help you make the most out of your coverage and avoid unexpected costs. Always read the fine print and ask questions before signing the contract. It’s your home and your investment, so it's essential to have clarity on what's covered and what isn't.

Remember, a home warranty can offer peace of mind when unexpected home repair needs arise, but it's not a cure-all. Keeping up with regular home maintenance is still an essential part of being a homeowner. Welcome to the world of homeownership!


Always take the time to read and understand your home warranty contract before you need it. Knowing the extent of your coverage, including the exclusions, limitations, and your deductible, will help you make informed decisions when a home system or appliance breaks down.





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