It’s an especially good idea to obtain a home warranty if you’re a first-time homebuyer with no experience in maintaining a home.
Who Pays for a Home Warranty?
Whether the seller or buyer pays for the home protection plan and home warranty coverage will depend on your local customs. It’s normal for a seller to pay for the coverage in many locales, because it’s a seller benefit. The buyer won’t be calling the seller after closing if something breaks.
How Much Does a Home Warranty Cost?
These plans are fairly inexpensive, typically around several hundred dollars per year, but it can depend on the coverage and deductible. Home warranty companies sometimes run specials whereby they’ll either discount policy prices or offer additional coverage for the same price. Policies are generally prepaid for a year in advance. They can be renewed by the homeowner when they expire.
How Do Home Warranties Work?
Some plans provide for specific types of coverage, but most operate similarly and contain common verbiage.
The homeowner calls the home warranty company if a home system or appliance breaks or stops working.The home warranty company calls a provider with which it has a business arrangement.The provider calls the homeowner to make an appointment.The provider fixes the problem. The home warranty company will pay to replace and install the appliance if it can’t be repaired, depending on the contract coverage.The homeowner pays a small trade service fee for the visit—anywhere from $50 to $100. You can negotiate this amount when you sign up for a plan.
Home Warranty Coverage
You’ll want to ask what’s specifically covered under your plan, because all plans are unique. Ask your real estate agent whether upgrades are available, and 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.
General Coverage in a Home Warranty
Issues that are commonly covered include:
Air conditioning Kitchen appliances Washers and dryers Doorbells Furnace/heating Water heater Ductwork to code Garbage disposals Inside plumbing stoppages Ceiling fans Electrical systems Range and oven
The coverage for a home warranty plan can vary from state to state and from policy to policy, so ask to see a sample copy of a policy before you commit. Some homeowners swear by home warranty plans, and others loathe them.
What Might Not Be Covered
Not every mishap or breakdown will be covered by your plan. Home warranties might not cover:
Outdoor items such as sprinklers Faucet repairs, although this can vary Refrigerators, washers, and dryers, or garage door openers Spa or pools unless specific coverage is requested Permit fees Haul-aways Items that were broken before closing Exclusions noted in the policy
What Can Cause a Denial of Payment?
Sometimes, it can seem like the company is actively looking for a way not to cover a claim, and that assumption can be accurate at times. It may happen for a few reasons, including:
Improper maintenanceA pre-existing condition disclosed in a home inspectionCode violationsUnusual wear and tearImproper installation
What if You Disagree With the Outcome?
A service provider can deny a claim. Call your real estate agent and complain if that happens or if you’re unhappy with the service provided. Your agent can seek resolution for you if they have a good working relationship with the representative from the home warranty company. They might have some leverage.
