Most people read the list of covered systems and stop there. The definitions section, usually near the front of the contract, is where many claim questions are actually settled. A plan can list a furnace as covered and still leave you without a repair if the failure is described as something the contract does not count as covered.
Why definitions carry weight. Contracts are written in defined terms. A word like failure, normal operation, or covered component may have a specific meaning that differs from everyday use. When a claim is reviewed, the reviewer usually works from those written meanings, not from the sales page or the phone call that came before the contract.
Mark the terms that will matter to you. Go through the contract with a highlighter and mark every capitalized or defined word. Then find where each one is defined. Pay particular attention to these groups: what counts as wear and tear, what counts as a covered component versus an attached part, what counts as a repair versus a replacement, and what counts as a pre-existing condition. Note whether any definition refers to another document, such as a separate schedule or a manufacturer standard you have not seen.
Questions to ask before you sign. Who decides whether a failure is wear and tear, and is that decision made in writing? Does the contract say which definition controls if the sales page or a verbal summary says something different? Is there a written standard for what a reasonable repair means? If a part is covered only up to a certain age or condition, where is that stated? Ask for answers in writing. A clear answer is easy to give, and a vague answer tells you something too.
How the obligor fits in. The obligor is the party legally responsible for paying covered claims. Some contracts name the obligor in the definitions and others name it in a separate section. Whichever it is, make sure you know the name, because the definitions only help you if you know which party is bound by them.
A practical habit. Before you accept any plan, write one sentence in your own words for each defined term that will affect your home. If you cannot explain a term back in plain language, ask for its exact wording before you rely on it.
To read sample contracts before you buy, see Home warranties with a sample contract you can read before buying. Reading the definitions in a sample is a good way to practice.