Here's a copy of an email I received today from Allied Home Warranty. It's very interesting, and is their "Cliff Notes" version of home warranty contracts. You should always read the fine print, but here are some of the highlights: 

1) Normal Wear and Tear:
Coverage is provided for systems or appliances that become inoperable due to normal wear and tear only.
2) Pre-existing Conditions:
Covered systems must be in good working order at the start date of the warranty. (Allied’s “No Fault” Coverage for Buyer’s contracts only covers unknown pre-existing conditions, which are pre-existing conditions that are not known and
could not be detected visually or by a simple mechanical test.)
3) Unauthorized Repairs, Reimbursement
Contact your home warranty company when a repair is needed. No reimbursement for unauthorized repairs. Any reimbursement for authorized repairs will be at the
home warranty company’s cost for the repair, which is less than retail.
4) Overtime and Emergency Charges:
For service outside normal business hours (M-F after 5pm and weekends) or emergency service, client is responsible for additional charges and overtime.
5) Limits on Liability:
There are specific limitations on liability for locating, accessing, diagnosing, repairing and replacing covered items, such as $500 for covered plumbing repairs.
6) Improperly Installed, Mismatched or Maintained Systems:
Improperly installed, mismatched or poorly maintained systems are not covered. (Allied’s “No Fault” Coverage for Buyer’s contracts only covers repairs caused by improperly installed, mismatched or poorly maintained systems.)
7) Restoration, Cosmetic Defects, Lack of Capacity, Removal of Old Equipment:
Restoration costs, cosmetic defects, lack of capacity, removal of old equipment, noises and repairs that do not affect operation are not covered items.
8) Service Provided or Cash Paid:
Home warranty providers select their own affiliated or unaffiliated service providers to make the repair or replacement of the covered item, or they may elect to pay cash value to the homeowner for the repair. The cash value may be less than the retail value.
9) Major Repairs Incur Additional Charges for Non-covered Items:
For maror repairs, expect to pay to bring your house up to code, to improve/modify your systems to work with the newly replaced or repaired equipment, for city work permits, for disposal of equipment and/or hazardous materials, among other items. For major a/c and heating repairs, non-covered items typically cost from $500 to $1,200.
10) Code Violations and Modifications:
Bringing systems up to code in order to make a repair is not covered. (Allied's Premium Upgrade includes coverage for up to $250 in code violations per contract. Modifications or upgrades required for newly repaired or replaced equipment are not covered.
11) Upgrades, Brands, Colors or Dimensions:
Systems or appliance upgrades are the responsibility of the homeowner. Specific brands, colors and dimensions are not covered, and replacements are made with similar features, capacity, and efficiency (not an exact match).
12) Items Outside the Perimeter of the Home:
Other than plumbing stoppages, pool/spa and HVAC, only items within the perimeter of teh home are covered (plumbing leaks outside the home are not covered).
13) Indirect, Special, or Consequential Damages:
Fire, secondary damage, prior damage, acts of God (such as flood, freeze, lightning), mold, fungus, structural changes, vandalism, pests or pet damage are not covered.
14) Pool/Spa coverage is for pump, heater and filtration systems only--not for jets, cleaning, electronic management or other equipment. Refrigerators are replaced with similar features, capacity and efficiency (not an exact match and not the same brand).
15) Read the Contract:
This summary is an effort to provide you with general home warranty information. However, all home warranty contracts are different, so read and understand your home warranty provider’s contract. (You can view Allied’s home warranty contract by logging into your account at www.AlliedHomeWarranty.com. This summary does not replace or amend Allied’s contract.)