Texas Real Estate State Practice Exam 2025 – All-in-One Guide to Master Your License Success!

The primary purpose of a home warranty is to cover repair or replacement costs for home systems and appliances. Home warranties serve as a service contract that provides homeowners with financial protection against unexpected breakdowns of major components, such as heating and cooling systems, plumbing, and electrical appliances. When these items malfunction, the home warranty allows the homeowner to file a claim and have the repair or replacement costs managed by the warranty provider, thus reducing unforeseen expenses and offering peace of mind.

While enhancing property value may occur indirectly as a result of having a home warranty, it is not the primary function of such a contract. Home insurance focuses on protecting against loss or damage to the property from various risks, which is a different concept than the warranty's aim of maintenance and repair support. Additionally, home warranties do not influence mortgage approvals—they are separate aspects of homeownership and purchasing.