The 411 on Home Warranties - Northern Title Blog
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The 411 on Home Warranties

The 411 on Home Warranties

Nobody wants to deal with the headache and financial burden of repairing major home appliances and systems that are expected to work. That’s why home warranties are there– for both existing homeowners, and for those closing on a home. 

What is a Home Warranty?

A home warranty is an optional, additional purchase offered at closing that pays for the repair of any home appliances should they break. It is a policy that gives you, as a homeowner, peace of mind should any major appliance or system break. 

Home Warranty vs. Homeowners Insurance

A home warranty may sound very similar to homeowners insurance, but they are indeed very different. A home warranty covers repairs and replacements of a home’s systems and appliances when they break from normal wear and tear, whereas homeowners insurance pays for structural damage and loss of personal property from robbery or fires. 

What does a Home Warranty Cover?

Assuming there were known pre-existing conditions, home warranties usually cover the following major appliances and systems:

  • Water heaters
  • Central air conditioning systems
  • Central heating systems
  • Interior electrical systems
  • Humidifiers
  • Dishwashers
  • Refrigerators
  • Ranges, ovens, and cooktops
  • Built-in microwaves
  • Garbage disposals
  • Washers and dryers
  • Roof leaks
  • Garage door openers
  • Plumbing systems 

If your home has items like pools, spas, septic tanks, or other miscellaneous items, you may purchase additional coverage for those items. 

A home warranty typically does NOT cover pre-existing conditions, poor installation/ maintenance, code violations, unusual wear and tear, commercial-grade appliances, or items already covered by homeowners insurance. 

How Does it Work?

The process is simple. Similar to insurance, the homeowner files a claim with the warranty company. The company will review their warranty plans to determine if the item in question can be covered under their contract. A local contractor schedules an appointment to verify the claim and diagnose the situation, after which the repairs are handled. If the appliance or system cannot be repaired, the warranty company will pay to replace and install the item. You pay a service fee to the warranty company (typically between $50-$100), and that’s it!

How Much are Home Warranties?

Home warranties vary depending on the coverage you are looking for, but generally speaking, many range between $350 -$600 on average and offer over $20,000 worth coverage. 

Similar to insurance, some warranties may offer a lower deductible, but a higher annual fee, or vice versa. 

Depending on the home warranty company you go through and their terms of contract, you may also have to pay a service fee or deductible (usually averaging between $50-$100).

How to Choose a Home Warranty Company

Several providers offer different home warranty plans. Depending on you, your family, and your home, you can choose the plan the best fits you. Find a plan you can afford and research what their company can offer you. Understand their contact and don’t be afraid to ask them any questions. After all, this is your home and your money we’re talking about. 


If the buyer and the buyer’s agent don’t have a preference on a particular home warranty company, the title company can decide. Then, using the money from the real estate transaction, the title company “purchases” the warranty. The warranty is then transferred to the buyer beginning on the date of closing. 

While a home warranty is optional, it should be noted that purchasing one can alleviate stress and financial strain down the road for new homeowners. Although you do have to pay for it upfront (or some realtors purchase one as a gift to new homebuyers), the savings could beat the potential expenses.  

Let Northern Title help add to your peace of mind. We’ll help you with all of your closing work and secure the home warranty that best suits your needs. Call us today to set up an appointment!