What is a Home Warranty?
A home warranty plan is a service contract made with a third party repair company. Home warranties are designed to protect your home’s appliances and systems from breakdowns caused by normal wear and tear. For an appliance or system to be covered, it must be in working order when the contract is entered into with the warranty company. There are many options when it comes to home warranties, and your REALTOR® will guide you to make sure you get the right coverage. The purpose of the home warranty is to make sure that you are not met with unexpected repairs or system failures during the term of the policy.
A home warranty covers all the major systems of a home. They provide insurance against repairs or failures of electrical, plumbing, water heater, appliances, garbage disposal, heating, air conditioning and sometimes they include roof, pool/spa and even building code issues. The coverage depends on the policy itself, and the price corresponds with the level of coverage. Make sure you have reviewed your contract and coverage before you need to use it. You should be clear on what is covered/not covered (e.g.:- the ac condenser may not be included), any cap limits on coverage, and is there a deductible or trade call fee?
So how does a home warranty work?
If there is a problem with a covered system, you will contact the home warranty company and place a claim. They will then send a repair person to your home to assess and correct the problem. This could entail a minor repair or a complete replacement of the appliance or system.
If you are selling a home, you can purchase a home warranty that will cover your appliances and systems during the listing and up until the sale. The warranty then transfers to the buyer for a period of one year. A home warranty can help to minimize post-sale conflict should an appliance or system fail after the closing.
Most warranties are about $500-$700 per year; a small price to pay for the peace of mind that homes warranty provides.
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