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Many of you have been in your home for a number of years – along with the same major appliances or mechanical systems.

Generally, when an HVAC system reaches 10 years old, replacement will be needed sooner than later. Perhaps, your hot water heater is on its last legs. These are major items and replacement costs can be expensive.

A home warranty is an important tool to reduce the risk and potential financial burden of home ownership.

A home warranty covers service, repair or replacement of your home’s major systems and appliances, typically for a one-year term. Most home warranty companies offer three types of plans – the appliance only (e.g. dishwasher, washer/dryer or refrigerator), the system only (e.g. HVAC, plumbing or electrical) or a combination of the two.

Bottom line: it is a contract of inclusion that only covers items specifically listed.

Homeowner’s insurance is different. It provides financial protection in case of a disaster or accident, with a standard policy insuring a home’s structure and belongings in case of a “known peril” listed in the contract. It is a contract of exclusion that covers everything except what it says it won’t cover.

In fact, the National Home Service Contract Association says a loss covered by insurance cannot be covered by a home warranty, and if it’s an insurable loss, a warranty won’t cover it.

If an air conditioner just stops blowing cold air, it would be covered by a home warranty. If a tree falls on an air conditioning unit due to a stiff wind, that is a claim for homeowners insurance, which provides coverage for damage or loss due to weather events, fires, floods vandalism, theft or other events.

When choosing a home warranty, read the fine print. There may be coverage limits on repair costs. A limited network of professionals could result in additional wait time for the appliance to be serviced. Service fees may vary, so fee amounts may vary as well as any additional costs for repair or placement.

Ensure certain appliances are covered. Understand if you choose to do the repairs yourself, the warranty company will not compensate you for your time or expense.

There are several home-warranty companies. Compare coverage. Ask questions. Choose a plan that works best for you.

Joan Koczor is a senior advocate and a member of the Age-Friendly Maricopa Advisory Board.