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What Does a Home Warranty Cover?

what does home warranty insurance cover

A home warranty is designed to ensure appliances stay in working order.


In the early 1970s, American Home Shield came up with the idea to provide financial coverage for the appliances and the basic systems like plumbing and heating in a home. They contracted with local suppliers for the services and sold the coverage to mostly to home buyers and sellers. It was appealing to buyers because they had no idea of the life to be expected from the seller's appliances and systems in the home, and the repair or replacement costs could be high.


Buying a home with a home warranty guaranteed the seller that they would not be sued for appliances breaking or pipes breaking, especially for the first year after the sale. On the other hand, the new owners knew the worst possibility

they faced in a broken appliance dilemma was calling the warranty company and paying only the service call fee. It served to make both parties feel better, even though the warranty might never be utilized and the cost never recouped.



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