Why Do Home Warranty Companies Have Coverage Limits?

Why Do Home Warranty Companies Have Coverage Limits?

All home warranty companies have limits on their coverage. Coverage limits help keep the costs of purchasing a Home Service Plan (home warranty) affordable for the average homeowner. They also allow home warranty companies to set expectations for your specific coverage. And of course, limits define how home warranty companies cover the cost to repair/replace eligible system or appliance breakdowns.

Though all home warranty companies have these limits, each company’s limits are different. Today, we’ll look at the following:

  1. Why limits exist
  2. What happens if you exceed a limit
  3. Can you increase your limits?

Why Do Home Warranty Limits Exist?

Limits exist for two main reasons.

  1. To allow home warranty companies to provide the most coverage to homeowners at a reasonable price
  2. To allow the home warranty company to continue providing quality coverage and service that homeowners expect and deserve

The first reason is the one most likely to affect you. Home system and appliance breakdowns can be extremely expensive. However, 2-10 Home Buyers Warranty (2-10) has an extensive network of contractors and vendors, which lets us leverage cost discounts on repairs and parts, often below wholesale price. That’s how we can offer you low-cost coverage and service your breakdown at a fraction of the retail cost.

We’ve designed our coverage and limits to address the kinds of breakdowns that over 95% of homeowners experience. Though many homeowners won’t reach their coverage limits due to our buying power, these limits do protect against unusually expensive claims and help keep prices lower for all homeowners.

An Example of How Limits Work

Consider this example. You can get a 2-10 Simply Kitchen plan that protects your kitchen’s major appliances for as little as $27 a month. With this plan, the maximum dollar limit on an eligible refrigerator repair or replacement is $2,000.

So, say your fridge breaks down. Without warranty coverage, you could pay hundreds or thousands of dollars to repair or replace your refrigerator—upfront and out of pocket.

However, with coverage, you’d likely just pay a Service Fee, which is considerably less. (Note: Non-eligible repairs or items may lead to non-covered costs for you. Fortunately, you can always access your 2-10 Home Service Plan through your account and review your coverage.)

That’s a sizeable amount to save on unexpected, upfront, out-of-pocket costs, all while 2-10 helps you find a trustworthy technician.

In short, limits help keep coverage affordable for the average homeowner. They also protect homeowners from bearing the full retail cost of other customers’ unusually expensive claims. Finally, they help home warranty companies manage the claim and provide clear expectations.

Protect more,
pay less with 2-10

Low-cost home service plans.

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What Happens If I Exceed a Limit?

Because every service request is unique—and 2-10 offers several plans based on your needs and budget—there is no one-size-fits-all answer to this question. However, 2-10 will contact you before any work begins if we anticipate that a repair or replacement will put you over your 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 limit.

Fortunately, 2-10’s transparent Home Service Plans and supportive customer service team can help walk you through your limits. Because no two breakdowns are exactly the same, the answer to this question is as unique as your situation.

Can I Increase My Limits?

In some cases, yes! In fact, 2-10 created an option for homeowners who want to raise certain limits. When you purchase our Luxury option, you can raise your limits on certain systems and appliances.

Consider the following example using 2-10’s Complete Home plan. This plan covers unexpected breakdowns to your home’s centralized heating and cooling system, plumbing, electrical, and kitchen appliances.

System/Appliance Covered With Complete Home Base Limits (No Luxury Option) Increased Limits (Luxury Option)**
Heating $2,000 $5,000
Air conditioning/Heat pump $2,000 $5,000
Electrical $2,000 $5,000
Plumbing $2,000 $5,000
Refrigerator $2,000  

$5,000 in aggregate (combined)

Oven/range/cooktop $1,000
Dishwasher $500
Built-in microwave $500

**Subject to all other limits stated in the Home Service Plan, including individual item limits and those of any selected options, and the Aggregate Limit of $25,000.

As you can see, you can raise your limits by $3,000 for each of your heating and cooling, electrical, and plumbing systems. You can also raise your total combined limits on your kitchen appliances by $1,000 and give yourself more coverage flexibility.

That’s a $13,000 limit increase overall.

So, even though limits will always exist with a Home Service Plan, 2-10 gives you options to raise those limits. That helps you personalize your coverage for added peace of mind at an affordable cost.

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Home warranty coverage limits allow the greatest number of homeowners to get cost-effective coverage at a relatively low price. Every home warranty company has limits on coverage, but each company’s limits differ.

Some companies will set low limits that essentially guarantee you’ll pay out of pocket. 2-10 works to set limits that allow as many homeowners to obtain coverage as possible.

2-10 takes pride in being transparent about limits and exclusions in our Home Service Plans. 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, we want to help you find the best coverage for your budget and let you personalize your coverage for years to come.

Protect more,
pay less with 2-10

Low-cost home service plans.

A/C Unit


Protect more,
pay less with 2-10

Low-cost home service plans.

Learn More