Home warranty marketing focuses on what's covered. The contract focuses on what's not. Before you buy - or before you file a claim - the exclusions list is what determines whether you'll be paid. These are the standard exclusions applied across all major companies.
Universal Exclusions - Every Company
Pre-existing conditions
Anything that failed before your coverage started. The #1 denial reason across all companies.
Improper installation
Equipment installed incorrectly by the builder, a previous owner, or an unlicensed contractor.
Improper prior repair
A system previously repaired incorrectly or by an unlicensed contractor.
Lack of maintenance
Failure attributed to missed maintenance - dirty HVAC filters, unflushed water heater, no annual HVAC service.
Cosmetic damage
Dents, scratches, discoloration, broken handles, cracked glass - anything aesthetic.
Secondary / consequential damage
Water damage from a plumbing leak; food spoilage from a fridge failure. The warranty covers the repair, not what the failure caused.
Permit and code upgrades
When a repair requires bringing systems up to current building code - new wiring gauge, updated fittings, new refrigerant type.
Haul-away and disposal fees
Removing the old appliance or system when it's replaced.
Structural components
Foundation, framing, roof structure, walls - the home itself, not systems and appliances.
Items Not Covered in Standard Plans
Home Warranty vs. Homeowners Insurance - What Each Covers
| Event or Failure | Home Warranty | Homeowners Insurance |
|---|---|---|
| HVAC failure (wear) | ||
| Water heater failure | ||
| Lightning strike damage | ||
| Flood / groundwater damage Separate flood policy needed | ||
| Fire damage | ||
| Storm / hail damage | ||
| Theft | ||
| Liability | ||
| Exterior service line failure Usually excluded from both | ||
| Appliance breakdown (wear) |
The Coverage Gap: What Neither Policy Covers
There's a gap between sudden-event coverage (homeowners insurance) and mechanical wear coverage (home warranty). Several common and expensive scenarios fall between them:
Mold remediation from a covered plumbing leak
The warranty covers the pipe repair. Neither policy typically covers the mold that grows from water left behind.
Foundation cracks from settling
Settling is structural - not a warranty item, and not a sudden-event insurance claim.
Drainage problems from root intrusion
Interior drain lines may be covered; root removal and pipe restoration often are not.
Pest damage to wiring or plumbing
Pest damage is excluded from both standard policies. Pest control is a separate service.
Exterior sewer lateral / water main failure
Standard home warranty stops at the house; standard homeowners insurance stops at sudden events. A worn-out sewer line falls between both.
Planning for gap risks: Budget a separate home repair emergency fund for the scenarios neither policy covers - mold, foundation issues, pest damage, exterior lines. A $5,000–$10,000 reserve handles most of these without requiring either an insurance or warranty claim.