A home warranty plan is essentially a home protection plan. With this plan in place, you don’t have to worry about costs of things breaking or malfunctioning at home. Home warranties can be as exhaustive as you want them to be. First-time home buyers with little experience in maintaining a home can benefit from such a warranty program.
When ownership of property changes hands, the cost of home warranty may be borne by either the seller or the buyer, depending on the norm followed in a given area. In some places, the seller bears the cost because doing so can help the seller get a good deal. Whereas in some locations, real estate agents may actually gift the buyer home warranty after the deal is closed.
Home warranties are not expensive, and usually don’t cost more than $500. If you keep your eyes open, you may snag a very good home warranty deal either at a discounted rate or with extra cover for the same rate. You can renew these policies annually.
The terms of your policy may vary with the extent of cover offered but will usually be similar. Basically, if a home system or appliance malfunctions or breaks, you get in touch with the home warranty company. The home warranty company notifies a provider who gets in touch with the home owner. The provider will try to repair the appliance. If the appliance cannot be fixed, the home warranty company will pay for replacement depending upon the agreed cover. The homeowner will pay a small fee that goes toward trade service.
Learn about the extent of cover offered. Check if the cover can be upgraded. Will the home warranty company execute repairs to ensure compliance of systems with the latest regulations?
If the compensation offered by the company is low, or worse there is denial of compensation then you may want to get in touch with your real estate agent. It’s an idea that works. If your property agent is on good terms with the home warranty provider, then he may try and get you a better deal.
Find out what’s covered and what’s not. Outdoor items like sprinklers are not covered. Some plans may cover faucet repairs. Spas and pools require specific cover. Learn about the exclusions policy.
Usually, air conditioners, dishwashers, doorbells, heating systems, ducts, garbage disposals, ceiling fans are covered.
Denial of payment can happen for reasons that include poor maintenance, incorrect installation, wear and tear resulting from improper use, code violations, and issues already present that may be disclosed in a home inspection.
Request a sample copy of the policy before you sign on the dotted line. The terms of coverage can vary from state to state and between vendors.