Home Warranties at Closing

A Common Closing Table Question

Many Ohio home purchase agreements include an offer, sometimes from the seller as an incentive, for a one-year home warranty. Buyers frequently ask their title company or real estate agent whether this is worth accepting, and just as often confuse it with title insurance. The two products protect against very different risks, and understanding both helps you make an informed decision at the closing table.

What a Home Warranty Actually Covers

A home warranty is a service contract, not an insurance policy, and typically covers the repair or replacement of specific home systems and appliances for a set term, usually one year. Common coverage includes:

• HVAC systems, including furnaces and air conditioning units.
• Plumbing and electrical systems.
• Kitchen appliances such as ovens, dishwashers, and garbage disposals.
• Water heaters and, depending on the plan, well pumps or septic systems.

Coverage is subject to exclusions, pre-existing condition clauses, and service call fees, so buyers should read the specific plan documents rather than assuming broad coverage.

How a Home Warranty Differs From Title Insurance

It's easy to conflate a home warranty with title insurance since both are sometimes discussed near the closing table, but they serve entirely different purposes. Title insurance protects your ownership rights in the property itself, covering issues like undisclosed liens, forged documents in the chain of title, or boundary disputes that existed before your purchase. A home warranty, by contrast, has nothing to do with ownership or title. It's a maintenance-style contract covering mechanical breakdowns of systems and appliances after you move in.

Questions to Ask Before Accepting a Home Warranty

• What specific systems and appliances are covered, and what is explicitly excluded?
• Is there a service call fee each time you request a repair?
• Does the plan cover pre-existing conditions the inspection may have flagged?
• Can the warranty be renewed after the first year, and at what cost?

Reading the Fine Print Before You Decide

Home warranty contracts vary significantly between providers, and the marketing language on a glossy brochure doesn't always match the coverage terms buried in the contract. Before accepting a warranty, whether it's offered free by the seller or purchased separately, ask specifically how claims are filed, how quickly service is typically dispatched, and whether the provider has a track record of denying claims for reasons like 'improper maintenance.' A warranty that sounds comprehensive at the closing table can turn out to be far more limited once you actually need to use it. It's also worth asking whether the plan covers code violations discovered during a repair, since older Ohio homes with outdated wiring or plumbing sometimes trigger additional costs that a basic warranty plan won't cover.

Making the Right Choice for Your Closing

Whether a home warranty makes sense depends on the age and condition of the home's systems and appliances, and whether the offer is coming at no cost to you as part of the seller's concessions. Your title company can't recommend a specific warranty provider, but understanding the distinction between this optional product and your title insurance policy, which protects your ownership rights for as long as you own the home, will help you evaluate the offer with clear eyes.