What happens when a home warranty expires?

When a home warranty expires, the homeowner typically must pay all repair costs out of pocket. A home warranty is a service contract that provides coverage for specific repairs or replacements of home systems and appliances, typically for a specified period, often one year. Once that term expires and without renewal, the homeowner loses the financial protection that the warranty offered. Therefore, if an appliance or system breaks down after the warranty period ends, the homeowner will be responsible for the full cost of repairs or replacements.

Renewals often come with terms requiring additional costs, thus making the first choice inaccurate. The third option regarding conversion to a homeowner’s insurance policy does not apply, as these two serve different purposes and are distinct products. Lastly, while some warranties may offer refunds under certain conditions, it is generally not standard practice for unused services after expiration, making the last option less applicable in this context.