Home Warranty vs. Appliance Warranty: Key Differences
Homeowners are responsible for maintaining the various appliances and systems on their properties. Unexpected repair and replacement costs can put a serious strain on your budget, but warranties can provide some financial protection. There are two main types of warranties for homeowners to consider: home warranties and appliance warranties. Understanding how these warranties work and the different kinds of protection they provide can shield you from the cost of an unexpected appliance or home system breakdown.
Keep reading to learn more about home and appliance warranties, including what they cover, how much they cost, and what factors to consider when choosing your coverage.
What Is a Home Warranty?
A home warranty is a service contract that helps spread the cost of repairing or replacing your home’s appliances and major systems. You’ll pay an annual or monthly premium to a home warranty provider. In exchange, the provider agrees to cover the repair or replacement of covered items if they break down due to normal wear and tear. The coverage usually lasts for a year, and you can renew it annually if you choose.
Home warranties are different from homeowners insurance. Home insurance policies protect your home’s structure and belongings from events like fire, theft, or natural disasters, while a home warranty focuses on repairing and replacing the appliances and systems inside your home.
What Does a Home Warranty Cover?
A home warranty tends to cover essential home appliances and systems, such as the following:
- Electrical systems, including major components like circuit breakers
- HVAC systems, including your heating unit and air conditioner
- Kitchen appliances such as refrigerators, ovens, cooktops, and dishwashers
- Plumbing systems, including pipes, drains, toilets, and main shut-off valves
- Washers and dryers
Some home warranties may offer additional coverage for swimming pools, spas, septic systems, or well pumps.
What Doesn’t a Home Warranty Cover?
Home warranty plans can offer valuable protection but don’t cover everything. Common exclusions in home warranties include the following:
- Cosmetic defects: They don’t cover issues like scratches, dents, or rust. If your appliance looks terrible but still works, your home warranty won’t replace it.
- Poor maintenance: You can’t rely on home warranties to repair or replace an appliance or system you’ve neglected for years. Home warranty companies often require proof of routine maintenance to ensure you do your part in the upkeep.
- Preexisting conditions: If an appliance or system had problems before purchasing the coverage, the warranty won’t cover the repair or replacement costs.
Some warranties also limit how much they’ll pay for a repair or replacement. For example, the warranty might cover a refrigerator repair up to a specific dollar amount, but you’ll need to pay for anything over that amount out of pocket.
What Is an Appliance Warranty?
An appliance warranty protects specific appliances in your home. Unlike a home warranty, which covers a range of items, an appliance warranty focuses on a single item, like your refrigerator, washer, or oven. These warranties are often included with the purchase price of a new appliance and typically last for a year.
During the warranty period, the manufacturer agrees to repair or replace the covered appliance if it stops working due to a material breakdown or manufacturing defect. An appliance warranty can bring peace of mind when investing in major appliances.
Types of Appliance Warranties
There are three main types of appliance warranty contracts:
- Manufacturer’s warranty: This is the most common type of appliance warranty and is typically included with the purchase price of a new appliance. The manufacturer covers the appliance against defects in materials or workmanship for a specific period, usually one year but possibly longer, depending on the brand and appliance type.
- Extended warranty: An extended warranty is an optional purchase you may be able to make at the time of sale or sometimes after the manufacturer’s warranty expires. Extended warranties can extend coverage beyond the initial warranty period, often for several years. They may offer additional benefits like breakdown coverage for everyday wear and tear instead of only for manufacturing defects.
- Home warranty add-ons: Some home warranty companies offer the option to add coverage for specific appliances to their plans. This can be a good option if you have a particular appliance you want to protect, but it may not be as comprehensive or cost-effective as a dedicated appliance warranty.
What Does an Appliance Warranty Cover?
What an appliance warranty covers will depend on the warranty type, the specific appliance, and your warranty contract terms. However, appliance warranties tend to cover repairs or replacements due to defects in the materials or workmanship. This means if your appliance breaks down because of a faulty component or poor manufacturing, the warranty is likely to cover the cost of repairs or of replacing the appliance with a new one.
Be aware of potential limitations to your appliance warranty coverage. Many warranties only apply to the original buyer of the appliance, so if you sell or give the appliance to someone else, the warranty won’t cover them.
By reviewing the terms and conditions of your appliance warranty, you’ll know what’s covered and what isn’t. This can also help you decide if you need to purchase home warranty coverage for that specific appliance or additional coverage with an extended warranty.
Home Warranty vs. Appliance Warranty: Cost Comparison
Cost is a common consideration when purchasing a home or appliance warranty. Here are the typical costs for both types of coverage:
- Appliance warranty: Manufacturer’s warranties are often included in the purchase price of a new appliance, giving you coverage for no additional cost. Extended warranties cost around $150 for major appliances.
- Home warranty: The average home warranty costs between $360–$540 per year for an appliance or system plan. The price will depend on the plan you choose, your home’s size and age, and your location.
Cost data sourced via Angi.
Several factors will influence the cost of your home or appliance warranty. Plans with more comprehensive coverage will likely cost more than basic plans. Extended appliance warranties will offer more coverage for problems, but they’ll be more expensive than those only covering manufacturing defects.
The age and cost of what you cover will also influence the price. For example, home warranties for older homes are more expensive, and warranties on high-end appliances will cost more.
The most cost-effective option depends on your specific needs and budget. Individual appliance warranties supply enough coverage if you have a new home with well-maintained appliances. A home warranty might be the right choice if you have an older home or want more comprehensive coverage.
Pros and Cons of Home Warranties vs. Appliance Warranties
Both home and appliance warranties have advantages and disadvantages when it comes to protecting your appliances and home systems. Understanding the pros and cons of each will help you decide which option is better for your home.
Here are the pros and cons of a home warranty:
- Pros: A single home warranty can cover a range of appliances and home systems. It could save you money multiple times throughout the service period. It’s also convenient—home warranty companies will find qualified repair technicians for you and streamline the repair process during stressful situations.
- Cons: Home warranties don’t cover everything. You’ll need to be aware of exclusions and coverage caps. You’ll also need to pay a service fee or deductible for each claim, which can add up over time if you need a lot of minor repairs.
Consider these advantages and disadvantages of an appliance warranty:
- Pros: Because appliance warranties cover a specific appliance, they often offer more comprehensive protection. Extended appliance warranties can extend protection beyond the manufacturer’s warranty and may give you appliance coverage for years.
- Cons: Appliance warranties only cover a single appliance, so you’ll need separate warranties for each appliance you want to protect. You may need to pay extra if you want an extended warranty on top of the initial manufacturer’s warranty.
Factors To Consider When Choosing a Warranty
Whether you purchase a home warranty or stick with your appliance warranty, there are a few things you should keep in mind before making a purchase:
- Age of the item: If your home is older or your appliances are nearing the end of their lifespan, a warranty can provide valuable protection against potential malfunctions. For newer appliances, a standard appliance warranty may be enough.
- Budget: Consider how much you’re willing to spend on warranty coverage. Home warranty costs often include an annual premium and a service call fee or deductible for claims. The cost of an appliance warranty will vary depending on the item, coverage length, and the warranty policy you choose.
- Coverage needed: Decide what level of coverage you need. Do you want comprehensive coverage for a variety of items? A home warranty may be the better option. If replacing a single item is your concern, an appliance warranty may be more cost-effective.
- Preferred service providers: Some home warranty companies have networks of preapproved repair technicians. Consider whether you would prefer to use your own repair service.
Our Conclusion
Home and appliance warranties offer financial protection for your home’s appliances and systems, but they work in different ways. Home warranties give you comprehensive coverage for major appliances and systems within your home. Appliance warranties cover a single appliance and are often included in its original cost, though you may be able to buy an extended warranty for an additional fee.
Whether you choose a home or appliance warranty will depend on your circumstances and budget. Carefully review the fine print of any warranty before you sign a contract, and ensure you know exactly what’s covered and what isn’t. Consider factors like your budget, the age of your appliances, and how much coverage you need. Getting quotes from multiple warranty providers can help you find the most cost-effective coverage.
FAQ About Home Warranties vs. Appliance Warranties
What are the two types of appliance warranties?
The two main types of appliance warranties are a manufacturer’s warranty and an extended warranty. A manufacturer’s warranty is usually included in the purchase price and covers breakdowns due to manufacturing defects. You can purchase extended warranties at an additional cost to obtain longer, more comprehensive coverage for repairs or replacements.
Are home appliance warranties worth the cost?
Whether home appliance warranties are worth the cost depends on your budget, the age of the appliance, and how much risk you are willing to take on. They are typically more cost-effective if your home appliances and systems are nearing the end of their lifespans.
What are the cons of a home warranty?
The cons of a home warranty include coverage exclusions like preexisting conditions, service call fees, and coverage caps.
What is the biggest benefit of a home warranty?
The biggest benefit of a home warranty is the financial protection it offers on repairs or replacements for appliances and home systems. Instead of facing a hefty repair or replacement cost, you can spread the cost over a longer period and potentially save yourself money in the long run.
How much does a home warranty cost per year?
According to Angi.com, the average home warranty costs between $360–$540 per year for an appliance-only or systems-only plan. You’ll need to pay a deductible or service fee on top of that cost for every claim you make.
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