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What is a Home Warranty?
A home warranty is a service contract that covers the repair or replacement of many of the most frequently occurring breakdowns of home system components and appliances.
Is Everything in My Home Covered?
No. Not everything is covered; however, most of the system components and appliances that breakdown frequently are covered.
Who Pays for the Home Warranty?
In many locales, it's normal for a seller to pay for the coverage because it's a seller benefit. Why? Because then the buyer won't be calling the seller after closing if something breaks. Many real estate agents will also give buyers a home warranty as a gift at closing.
How Much does a Home Warranty Cost?
They are fairly inexpensive, typically ranging from $250 to $400, depending on coverage. Home warranty companies sometimes run special sales and either discount policy prices or offer additional coverage for the same price. The policies are prepaid for a year in advance, at which time they expire or can be renewed.
How Do They Work?
Naturally, specific plans provide for specific types of coverage, but most operate the same way.
- If a home system or appliance breaks or stops working, the home owner calls the home warranty company.
- The home warranty company calls a provider with which it has a business arrangement.
- The provider calls the home owner to make an appointment.
- The provider fixes the problem. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance.
- The home owner pays a small trade service fee (less than $100).
Types of Coverage
Because plans differ based of your arrangements, you will have to ask specifically what is, and is not, covered. Ask your real estate agent if upgrades are available. Pay close attention to whether the home warranty company will pay for repairs to make certain types of systems or appliances compliant with new regulations.
What If I Disagree With the Diagnosis?
Of course, sometimes a service provider will deny a claim. If that happens or if you are unhappy with the service provided, call your real estate agent and complain. Your real estate agent, if she has a good working relationship with the representative from the home warranty company that is covering your home, may be able to get a resolution for you.
In short, don't take "no" for an answer! Call your real estate agent.
What is Not Covered?
- Outdoor items such as sprinklers
- Faucet repairs are not covered under all plans
- Not all plans pay for refrigerators, washers & dryers or garage door openers
- Spa or pools, unless specific coverage requested
- Permit fees
- Haul aways
What Can Cause Denial of Payment?
- Improper maintenance
- Code violations
- Unusual wear and tear
- Improper installation
General Coverage
- Air conditioning
- Dishwashers
- Doorbells
- Furnace / heating
- Water heater
- Ductwork
- Garbage disposal
- Inside plumbing stoppages
- Ceiling fans
- Electrical systems
- Range and oven
- Telephone wiring
However, coverage does vary from state to state and from policy to policy, ask to see a sample copy of a policy before you commit.
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