Purchasing a new home? It's a good idea to get a home warranty.
How do home warranties work? To start, lets define what a home warranty is and is not. Generally, a home warranty is an annual service contract. It can cover such items as appliances or systems that can need repair or replacement over time. Home warranty coverage will vary from company to company, but here is a good general breakdown of how they work and what they cover.
What Do I Do When I Need to Use My Warranty?
- If a home system or appliance breaks down or stops working, you call the home warranty company.
- Your home warranty company will call a service provider it has a business arrangement with.
- The service provider will call you to make an appointment.
- The service provider will fix the problem. If an appliance or system is malfunctioning and can’t be repaired, depending on your contract coverage, your home warranty company will pay to replace and install the appliance.
- You will pay a small trade service fee (usually less than $100).
- Remember, even if you have a Home Inspection prior to purchasing the home, you should still get a home warranty.
What’s Not Covered?
Be sure to check your specific policy, but in general:
- Outdoor items such as sprinklers
- Refrigerators, washers, dryers and garage door openers
- Spas and pools, unless specific coverage requested
- Permit fees
- Haul aways
What Can Cause Denial of a Claim?
These are the basic reasons that claims can end up being denied. Things such as improper maintenance, code violations, unusual wear and tear, or improper installation.
General coverage includes the following items, but be sure to review your policy and coverage’s carefully. Each insurance company may have special offers or packages.
- Air conditioning
- Furnace/heating systems
- Water heaters
- Garbage disposals
- Inside plumbing stoppages
- Ceiling fans
- Electrical systems
- Range and ove
Be sure to read thoroughly and understand your warranty before you agree to the terms. Ask questions to clear up anything you don’t understand before you sign anything.