If you’re buying a home, you may wonder: Is a home warranty required at closing? While a home warranty at closing is not a prerequisite, having coverage can enhance your financial well-being in ways an often-required homeowners insurance policy cannot. Consider the vital role that home warranties help fill — protecting your household budget from unexpected costs.

When you have coverage, the home warranty company pays for the repair or replacement of covered appliances and systems that break — and failures can happen regularly.* Homeowners insurance, on the other hand, covers rare events such as lightning strikes, wind damage, theft, or fire. So, buying warranty coverage not only provides crucial budget protection that gives you peace of mind it’s also an investment you’ll use more often than your homeowners insurance.

When Can You Purchase a Warranty?

When you’re about to close on your new home, talk to your real estate agent about adding a home warranty at closing. Whether you’re working with an agent or not, it’s often easier to include the cost of warranty coverage in your closing costs. You also have the option of buying a home warranty before closing (any time after your offer is accepted), or you can purchase a home warranty after closing. No matter when you purchase coverage, with a First American home warranty, you’ll also get extra member benefits you can use immediately to help you settle into your new home.

In this guide, you’ll learn who pays for a home warranty at closing (Hint: It’s not always the home buyer) and the benefits of purchasing coverage during the home-buying process. We’ll also cover what you should know about buying a home warranty after closing, purchasing it as a seller, or when you already own a home.

Are you looking for tips to help you prepare for a home closing? Our Home Buyer’s Guide to the Closing Process can help.

Who Pays for a Home Warranty at Closing?

Many people choose to purchase home warranty coverage when buying a new home. Because you can easily select the plan that’s right for you before your closing date, adding the home warranty fee at closing is a simple next step.

However, there are also situations where a motivated home seller may include a home warranty as an incentive for a quick sale. They may also include coverage to provide buyers with confidence to make an offer on their home. Sellers can buy coverage during the listing period for up to 180 days. They can also work with an agent or the home warranty company to extend coverage for the buyer's first year in their new home and alleviate any worries.

Finally, real estate agents may include coverage as a gift to their buyers. If you’re working with an agent, discuss your options for purchasing coverage and rely on their expertise when choosing a home warranty plan. If you are buying a home without an agent, call us at 833.338.0478 or learn about your coverage options.

Benefits of Buying a Home Warranty at Closing

When a seller accepts your offer on a home, you quickly discover the many steps you need to take as you move through the home-buying process. If you’re working with a real estate agent, you’ll have a resource who can help you prepare for and complete these steps. One such step your agent may discuss with you is ordering a home warranty at closing. You can also review and select your plan by visiting our specialized coverage page for home buyers.

Here are some of the reasons why it’s important to add home warranty coverage at closing.

Budget Protection: Your savings may be largely depleted just after buying a new home. A large, unexpected expense — especially during that first year of homeownership — can wreck your budget. Home warranty coverage offers you and your wallet some peace of mind. It helps protect your budget from the high cost of repairing or replacing covered items, often saving you hundreds or thousands of dollars.

Coverage for Major Appliances and Home Systems: Today’s appliances include technological features designed to make life easier. When modern appliances break, these handy features can add to what are often already costly repairs. A home warranty can protect your appliances, from the newest luxury brands to older appliances regardless of age. Coverage also protects your budget when breakdowns occur to home systems like plumbing, electrical, and water heating. When you need to find and hire your own repair person to fix issues with home systems, the costs can easily break your budget.

Expanded Coverage: Any First American home buyer warranty plan you choose will come with expanded benefits. Here are some of the highlights of expanded home buyer coverage:

In most areas, plans can protect many items in the real estate base plan. Be sure to review the “What Home Warranties Cover” table below to see a full list of appliances and systems covered in our basic real estate plan.
Plans that include air conditioning coverage also cover the cost of refrigerant.
Helpful services, such as re-keying the locks in your new home. You may also have access to move-in assistance from handyman services such as Porch.**
First American will cover the items you want to protect, regardless of age. As long as your system or appliance is in working condition when coverage starts, it’s protected.

Generous Coverage Limits: As mentioned, because today’s appliances and systems are more efficient than older models and include more high-tech features, they can be expensive to repair and replace. Luckily, First American has some of the most generous coverage limits in the industry to help protect your wallet. If you want to protect luxury appliances when they break down, be sure to add upgraded coverage to maximize limits on repair or replacement costs.

No Waiting Period: Many first-time homebuyers ask, “What is the waiting period for a home warranty?” The good news is that, when you buy a First American home warranty as part of a real estate transaction, there is no waiting period! Your warranty coverage begins as soon as you close on your new home. Keep in mind that while new homebuyers do not have a waiting period, all home warranties require items to be in good, safe working condition at the start of coverage.

A young couple receives the keys to their new home.

Buying a Home Warranty After Closing

While buying your plan at closing can be ideal, you can also purchase a home buyer’s warranty for up to 60 days after your closing date. You’ll still enjoy enhanced coverage with special real estate pricing. More importantly, you’ll be protected from unexpected expenses for the entirety of your warranty contract, which typically lasts one year. (Remember: If you miss the 60-day window post-closing, you can review options here to purchase home warranty protection, or get a free quote.)

With home warranty coverage protecting your budget, you can feel free to spend those hard-earned savings on other things. You may want to make some home improvements in your new place or take care of repairs the home inspection turned up.

What Does a Warranty Cover?

The plan you buy can cover many of the major appliances in your new home, including any you negotiated for as part of the sale. A home warranty plan can also protect many systems in your home, from the air conditioning and heating to the plumbing and electrical systems. The following table provides a look at what home warranties can cover:

Appliances	Systems	Plumbing
Kitchen Refrigerator	Central air conditioning	Plumbing Stoppages
Oven / Range / Cooktop	Heating	Water Heater
Dishwasher	Ductwork	Toilet Tanks and Bowls
Washer	Electrical System	Garbage Disposal
Dryer	Ceiling and Exhaust Fans	Circulating Pumps
Built-in Microwave	Garage Door Openers	Sump Pumps
Trash Compactor	Central Vacuum System	Pressure Regulators
	HVAC tuneup option	Instant Hot Water Dispenser

Coverage Upgrades

First American Home Warranty also offers add-ons and upgraded coverage^† to further protect your wallet. Here’s a look at the upgrades you can purchase with your plan:

Appliance Plus: Doubles the appliance coverage limit for your kitchen and laundry appliances.

Plumbing Plus: Repairing leaks or breaks to water, drain, or gas plumbing can be expensive when the pipes are encased in concrete, or outside the home’s foundation. You can extend protection to cover these issues, as well as water heater expansion tanks, installation of ground-level cleanouts, and clearing of stoppages caused by roots.

First Class Upgrade: Adds coverage for building permits, upgrades required by building codes, recapture and removal of refrigerant, and disposal of appliances, systems, or components we replace.

Codes, Mods, and More: Provides an added allowance for correcting code violations and making modifications when repairing or replacing HVAC systems, water heaters, and more.

Why Should You Purchase a Warranty?

Buying a home is a thrilling, nerve-wracking, and expensive adventure. More expenses can and will pop up when something unexpectedly breaks down. Including a First American home warranty at closing protects you from unexpected costs. Our coverage also can help pay for the things your homeowners insurance won’t. Whether your new home is a single-family, condo, mobile home, or townhome, First American can protect the appliances and systems inside.

A man wearing a suit puts his hands over a small miniature of a house, protecting it from harm.

Choose Your Home Warranty

When you are choosing home warranty coverage, be sure to ask your real estate agent for advice (if you’re working with one). They can help you decide what level of coverage works for you.

If you’re not involved in a real estate transaction, you can still have warranty protection for your home. Here’s how to get a free quote.

Keep in mind that First American is an industry-leading provider of home warranties for home buyers, with 40 years of experience. You can count on us from the moment you close on your new home.

As a new home buyer, you qualify for our special pricing and expanded home warranty coverage. If you don’t buy your plan at closing, make sure to order within 60 days of your closing date. To learn more, get a personalized home buyer’s warranty quote.

The contents of this article are provided for general guidance only. First American Home Warranty does not assume any responsibility for losses or damages as a result of using this information.

*Be aware of non-covered costs even with your home warranty coverage. Please review your sample contract for specific coverage, terms and limitations.

**Porch Services may not be available in all areas.

^†Please review the sample contract for specific coverage, terms, and limitations.