Home warranty is a service contract that covers the cost of maintenance of a major housing system (for example, plumbing or electrical wiring) for a set period of time from the date a house is sold. The warranty guarantees repairs to the covered system and is renewable.
Home warranty has also been defined in several insurance statutes, and sometimes such a contract constitutes a contract of insurance. For example, §38a-320 of the Connecticut General Statutes provides that “‘home warranty contract’ or ‘home warranty service agreement’ means any agreement in which any person, firm, corporation or association promises or agrees to repair or replace any structural component of a single or multiple-family dwelling of four or less units, necessitated by (1) wear and tear, (2) deterioration or inherent defect, (3) failure of an inspection to detect the likelihood of wear and tear, deterioration or such defect, or (4) substandard material or workmanship”.
[Last updated in April of 2022 by the Wex Definitions Team]