Home warranty coverage limits refer to the maximum amount a provider will pay to repair or replace a covered item, or the total payout allowed for all claims during the plan agreement term.
These coverage limits:
- Help keep the costs of purchasing a home warranty plan affordable.
- Define how home warranty companies cover the cost to repair/replace eligible system or appliance breakdowns.
- Allow home warranty companies to set expectations for specific coverage.
While every home warranty provider has coverage limits, they tend to vary based on the company or plan. Let’s go over:
- Why home warranty coverage limits exist
- What happens if you exceed a limit
- Can you increase your limits?
Why Do Home Warranty Coverage Limits Exist?
The two main reasons why home warranty companies have coverage limits:
- To provide the most coverage to the most people at a reasonable price.
- To address the most common breakdowns efficiently and effectively.
Covered breakdowns to home systems and appliances can be expensive without a home warranty. For example, an AC repair or replacement could cost up to $6,000 on average.* 2-10 uses our network of independent service Pros and relationships with vendors to access discounts on parts and services, which allows us to offer you lower-cost solutions, typically at a fraction of the retail price.
2-10’s coverage and limits are designed to address the kinds of breakdowns that over 95% of homeowners experience. You may not reach your home warranty coverage limits due to 2-10’s buying power, but these limits do protect against unusually expensive claims and help keep prices lower for all homeowners.
How Do Home Warranty Coverage Limits Work?
Let's use a general example to show you how home warranty coverage limits work. Note that this example uses simplified numbers to show how limits work in general. You can always review the most up-to-date limits by logging into the Homeowner Portal or by reviewing a sample plan agreement.
You have a 2-10 home warranty that covers kitchen appliances, including your refrigerator. Your home warranty coverage limit is $4,000.
Then, your fridge suffers a covered breakdown. Without a home warranty, the average cost to repair or replace a refrigerator could be up to $1,800.*
With your home warranty, you could reduce your costs to a much smaller service fee, which is usually just $25 or less.
That’s a lot of money to save on unexpected, upfront, out-of-pocket costs, all while 2-10 HBW helps you find a quality, independent service Pro.
In short, home warranty coverage limits help:
- Keep coverage affordable for the average homeowner.
- Protect you from bearing the full cost of other customers’ unusually expensive claims.
- Home warranty companies manage the service request and provide clear expectations.
What Happens If I Exceed a Home Warranty Coverage Limit?
Because every service request is unique—and 2-10 offers several plans based on your needs and budget—there’s no one-size-fits-all answer to this question. However, 2-10 will contact you before any work begins if it appears that a repair or replacement will put you over your home warranty coverage limit.
In some cases, you might be responsible for the dollar amount over the stated limit. In others, 2-10 might offer you a buyout to address your breakdown if the cost to repair/replace it exceeds the home warranty coverage limit.
A buyout is a cash payment offered in place of a repair or replacement when the cost exceeds your plan limit.
2-10’s transparent home warranty plans and supportive customer service team can help walk you through your home warranty coverage limits.
Can I Increase My Home Warranty Coverage Limits?
In some cases, yes.
Different home warranty plans come with different home warranty coverage limits. Upgrading your coverage to a higher-tier plan could help you raise your limits and access more coverage for more covered items as well.
So, even though home warranty coverage limits will always exist, 2-10 works hard to give you plans and options that fit your budget and help you prepare for expensive, covered breakdowns. This could help you access solutions at a more affordable cost than paying out of pocket.
FAQs
Hopefully, you now have a better understanding of why home warranty coverage limits exist. In addition, there are certain general facts about home warranties that your home warranty agent should make sure you know. Here are a couple:
What does a 2-10 home warranty do for you?
A 2-10 home warranty is a Plan Agreement that could help you reduce the costs when covered systems and appliances experience covered breakdowns. It also gives homeowners access to a network of quality, independent service Pros who can diagnose breakdowns.
What is a Plan Agreement?
A Plan Agreement is a contract between you and your home warranty company. It outlines exactly which systems and appliances are eligible for coverage, what's excluded, and how the company handles repairs and replacements. It also includes details about costs, limitations, and responsibilities for both you and the home warranty company.
Conclusion
Home warranty coverage limits allow the greatest number of homeowners to access cost-effective coverage at a relatively low price. Every home warranty company has limits on coverage, but each company’s home warranty coverage limits differ.
Some companies set low limits that essentially guarantee you’ll pay out of pocket. 2-10 works to set home warranty coverage limits that allow as many homeowners to obtain coverage as possible.
2-10 takes pride in being transparent about limits and exclusions in every home warranty. Those limits might make you nervous. But remember: 2-10's lower costs combined with limits allow you to get quality coverage at an affordable price.
In short, 2-10 wants to help you find the best coverage for your budget and let you personalize your coverage for years to come.
*Repair/replacement cost is the eightieth percentile as reported in a nationwide survey of homeowners conducted in 2024 by ClearVantage for Frontdoor, Inc.
