How does a home warranty work in Scottsdale, Arizona?

A home warranty is a service contract. You pay for it, and in return the company agrees to pay for repair or replacement of the appliances and home systems the contract lists. The Federal Trade Commission (FTC) describes it that way, and Arizona's insurance code defines a home warranty contract as a service contract for the service, maintenance or repair of items such as appliances, electrical, plumbing, heating and cooling systems in a residence.

I'm Jen Keene, a REALTOR® with eXp Luxury in Scottsdale, AZ, and I'm the agent people call at every stage of their life. Buyers and sellers ask about home warranties, so I read what the FTC, the Arizona Attorney General's Office, Arizona's statutes, the National Association of Insurance Commissioners (NAIC) and two other attorneys general say about them, and I've named the source next to each fact.

This is general information, not insurance or legal advice, and I'm not telling you whether a home warranty is or isn't a good idea. The contract you're offered is what counts, so read it. I checked each source on November 7, 2026.

No. The Connecticut Attorney General says a home warranty is a type of service contract, while homeowner's insurance, which mortgage lenders typically require, covers property damage or liability from accidents, and it warns consumers not to confuse the two. The D.C. Attorney General puts it more bluntly: home warranties are not insurance policies, they are service contracts.

The difference shows up in what each one pays for. The NAIC describes a home warranty as covering the mechanical breakdown of individual parts of a home, such as the electrical and plumbing systems, and calls a homeowners policy something that isn't a maintenance contract because it doesn't pay to repair items that simply wear out. The Insurance Information Institute says the same about a standard policy: it won't pay for damage caused by routine wear and tear. I've written about what homeowners insurance covers and what to line up before closing.

Arizona has a permit rule. Under A.R.S. 20-1095.01, a company can't offer or issue a service contract unless it has qualified and been issued a permit by the director, and A.R.S. 20-1095.10 says that article of the insurance code applies to home warranty and home protection contracts. The same statute says a company operating under that permit is generally not subject to the state's other insurance laws unless a law specifically says it is. The NAIC says the same thing in plainer terms, that home warranties might not be regulated as insurance in your state.

The statute also says that if you ask before you buy, the company has to give you a specimen copy of the contract terms, either as a copy or by pointing you to a website. That is the statute's wording and I found it in that one source, so ask for the contract before you pay, and read it.

The Arizona Department of Insurance and Financial Institutions (DIFI) is one of the places Arizonans have filed home warranty complaints, according to the Attorney General's Office. DIFI's own pages would not load for me, so I can't tell you what its current permit lookup looks like. If you want to know whether a company has the permit, ask DIFI at azdfi.gov before you buy.

What the contract lists is what it covers. The FTC's advice is that if it isn't listed in the contract, assume it's not covered. The NAIC says a home warranty may or may not cover appliances and that it has exclusions and limitations you should review. The two sources I read disagree on the home's structure. Arizona's statute describes the contracts as able to include structural components, and the NAIC says a warranty doesn't cover the home's structure, so the list in your own contract is the only answer that counts.

The exclusions the sources name are these. The D.C. and Connecticut Attorneys General both list wear and tear, manufacturer defects and natural disasters as common exclusions. The D.C. Attorney General lists problems caused by not following the manufacturer's maintenance recommendations as a possible exclusion, and the FTC tells you to check whether the company can deny a claim if you skip routine maintenance. The FTC and the Arizona Attorney General's Office both point to caps on how much the company will pay, and the Arizona office says some are undisclosed.

The sources I read don't say how contracts treat problems that were there before coverage began, so I'm not going to state a rule. Ask the company in writing whether the contract excludes them.

A home warranty is optional, and the FTC describes it as something you pay extra for. Bob Vila's guide describes a seller buying one to attract buyers and a buyer buying one after closing to protect the new home. That is the one source I read on who buys, so treat it as an example and not a rule.

If you want one included in a purchase, tell me while we're writing the offer so we can put it in writing in the contract, with the company and the plan named. If you're a seller thinking about offering one, I'll go over the plan with you the same way, and I'll ask you to read the contract before it goes to a buyer. If you already own the home, you can buy one on your own, and everything in the next section applies.

Read the exclusions and limits first, because that's where the sources say complaints start. The Connecticut and D.C. Attorneys General both tell you to read the full contract and not to rely on what a salesperson says, and the Arizona Attorney General's Office says to compare what the contract offers with what they're trying to sell you, to confirm the coverage terms and the expiration date, and to read the exclusions section carefully.

The questions I'd write down are these. Which appliances and systems are listed, and which are excluded? Is there a cap on what the company pays, per item or in total? What do you pay for each service visit? The FTC, the D.C. Attorney General and the Connecticut Attorney General all say to look for deductibles and service fees, and the FTC says to check cancellation terms and fees. Does the company repair, or replace? The Connecticut Attorney General says to check that, along with whether you can choose the contractor, and the D.C. office says you may have to use the company's contractor. Can the contract be transferred if you sell the home? And what does it say about disputes? The D.C. Attorney General notes that contracts often require arbitration instead of court.

Two more from the FTC: check whether another warranty already covers the same item, and search the company's name with the word "review" or "complaint." The FTC also says to confirm who actually backs the contract.

The Arizona Attorney General's Office says anyone who believes they were defrauded by a home warranty company can file a consumer complaint through the office's website, and it offers a paper form by phone for people who want one. The FTC's page on service contracts says to report problems to the FTC at ReportFraud.ftc.gov and to your state attorney general. Arizona's Attorney General's Office also lists DIFI as another place Arizonans have filed complaints, which is the one source I read for that.

Before you file, gather the contract, your claim dates and any emails or texts with the company. The current complaint forms and phone numbers are on the Attorney General's website, so use those and not a number from a mailer or a call you didn't ask for. The FTC warns that calls about service contracts may come from telemarketers looking for money or personal information.

If you're deciding on a home, here's what a home inspection finds on a Scottsdale luxury home, and here's what homeowners insurance covers when you buy in Scottsdale. Here's how buying a home works in Arizona, step by step.

If you have a home in mind and want to talk through what to ask for in an offer, get in touch or call me at (480) 203-6605. For anything that depends on your own contract, the company and its written terms are what count.