After the excitement of closing and having the keys to your new house put in your hands, new homeowners are suddenly bombarded with offers for their house. One they should pay attention to is home warranty services. Homeowners insurance covers catastrophic emergencies like fire and hurricanes. Home warranties are different. Here’s why.
What Is A Home Warranty?
Homeowners insurance is about outside things affecting a house such as hail, water damages, trees falling on the roof during a storm, and theft or vandalism while you’re on vacation.
A warranty is about inside things like faults in the electrical and plumbing systems, the HVAC system, or the swimming pool. Appliances usually carry warranties of their own, but if they’ve expired, a home warranty might cover it.
A home warranty protects the seller and supports the buyer in the event a defective item occurs following closing on the house. Most plans cover a finite amount of items; the buyer can buy extra coverage for other items or systems in case something not covered fails.
In What Situation Might You Need A Home Warranty?
A friend has been banging on the front door for a minute or two having found the doorbell didn’t ring to alert you she was there. The malfunctioning doorbell would be covered under your home warranty.
You find the air isn’t cooling as it should, so you ask the home warranty company to check the ducts. Sure enough, they’re not up to code and/or have separated. You’re covered.
Your ceiling fans, landline telephone wiring, and your garbage disposal all stop working the same day. Your home warranty services company calls for help. You’re covered.
Homebuyers should be alert to the fact that coverage varies from state to state and from company to company. Ask for and carefully study an example policy to see if that particular company or policy is right for you.
What Is Included In A Home Warranty?
A home warranty generally covers:
- Indoor plumbing blockages
- Garbage disposals
- Water heater
- Stove and oven
Garages should be covered in the policy, but separate buildings like an in-law suite wouldn’t be covered. Likewise, separate garages with or without an apartment over it might not be covered. The buyer can add these things to the policy for an extra charge.
Homeowners should be prepared if the home warranty company says something isn’t covered due to a lack of maintenance. If the appliance or system wasn’t properly maintained by the former owner of the house, you’ll have to pay for replacement or repair yourself.
How Do You Get A Home Warranty?
Home warranties don’t cost a lot, but if they don’t cover systems or items that fail, then it will cost the home buyer money to replace or repair. Thus, homebuyers will need to do some research.
First, you’ll make a list of systems and appliances in the house that should be covered by a home warranty. These can include built-in microwaves, double ovens, washers and dryers, and refrigerators.
Your real estate agent will know about both the home and the warranty particulars. S/he knows the value of your house, so it stands to reason that s/he would know how much coverage you would need. S/he can also tell you which companies have a reputation for not paying and which do.
Second, now you’re ready to research home warranty companies. After you’ve listed each company and their fees, read the reviews. The company could have an A+ rating with the BBB but have poor reviews. Reviews are written by customers, and if the company has more high ratings than poor ones, then you should be good to go.
Third, some warranty companies want a home inspection of the systems and appliances before they’ll give you a contract. If some of the appliances are older, parts may be hard to come by in repairing them. The company might not replace them. You’ll need to know that before you sign anything. You’re ready now to sign the papers and write a check.
Home warranties can be a useful thing to buyers strapped for cash after a closing. They can be a blessing to first-time homeowners as well. Their main benefit is covering your home in systems or appliance failures.