What is the purpose of a home warranty?

A home warranty serves the primary purpose of covering the repair or replacement of major home systems and appliances that may fail due to normal wear and tear. This type of warranty is particularly beneficial for homeowners and prospective buyers as it provides a sense of security regarding unexpected repair costs after a home purchase. For instance, if a furnace breaks down or a refrigerator stops functioning, a home warranty would typically cover the service costs associated with those repairs or replacements, alleviating the financial burden on the homeowner.

The other options do not accurately represent the function of a home warranty. Guaranteeing the sale price of a home pertains more to market conditions and seller agreements rather than a warranty. Inflating the market value of a property is not a legitimate purpose of a home warranty; rather, it is a tool used for protection against repair costs. Providing insurance against natural disasters is covered by other types of insurance policies, such as homeowners insurance, but not under a home warranty. Therefore, the focus of a home warranty remains on safeguarding homeowners from costly repairs and offering peace of mind concerning the condition of essential home systems and appliances.