What is Home Warranty?
A home warranty is an optional service contract that helps pay to repair or replace major home systems and appliances — like HVAC, plumbing, or a water heater — when they break from normal use. It is different from homeowners insurance, which covers sudden damage and disasters. Sellers sometimes offer one to reassure buyers.
Example: A seller includes a one-year home warranty; when the dishwasher fails a few months after closing, the buyer pays a small service fee instead of full replacement cost.