What type of agreement does a home warranty in Indiana represent?

A home warranty in Indiana represents a service contract. This type of agreement specifically outlines the services and repairs that will be covered for certain systems and appliances in a home over a set period. The warranty typically provides homeowners with peace of mind by helping manage the costs associated with unexpected repairs or replacements of home systems, such as heating, plumbing, and electrical systems, as well as major appliances.

While an insurance policy covers broader risks and uncertainties and is generally regulated more stringently, a home warranty is more tailored to specific equipment and systems, focusing on maintenance and repair rather than on insurable events. It is also distinct from a financial guarantee, which assures the payment of a particular obligation, and title insurance, which protects property owners from financial losses due to defects in the title of the property.

This distinction helps homeowners understand the functional purpose of a home warranty in managing maintenance costs rather than providing comprehensive insurance coverage.