• Step 25 - Do You Want a Home Warranty?

Step 25: Do You Want a Home Warranty?

So we are clear, a home warranty is not the same thing as homeowner’s insurance, nor is it a substitute for it. Homeowners insurance covers major problems that your home could be subject to such as fire, flooding, property crimes, etc. The difference between that and a home warranty is, the home warranty is a separate contract in and of itself that covers repairs and replacements on different systems in your home usually for a period of one year. If you are buying new construction and the home has never been lived in, the builder will usually provide you with a one year warranty and then after that your own policy will kick in for a certain amount of time.

What does a home warranty usually cover?

Each policy is different and can depend on what company you have your warranty issued through, but in general they cover items such as your home’s appliances and systems like electrical and plumbing. Typically a home warranty will NOT cover exterior problems such as problems with the roof, fencing, decking, landscaping, or anything detached from the home like a garage or shop. It is very vital that you shop around when looking to purchase a home warranty. The cost and coverage of each policy could vary greatly. Generally speaking policies can range anywhere from $325-$1000 and are good from one year from the purchase date. All items covered under the policy must be in working order before a contract is entered into with a warranty company. When you are purchasing a home warranty consider the different types of coverage such as premium or optional. Pick the one that best suits your needs. This could depend on if your home has more than one of the same type of appliance. Extra appliances may not be covered under the standard warranty.

Who pays for the home warranty?

If we negotiated for the seller to provide the home warranty in our contract, then the seller would be the one paying and providing it. You will receive the details of the warranty at closing. If that was not the case, then it is up to you the buyer if you want to purchase one separately.

How much does a home warranty cost?

Many factors are taken into consideration to determine the cost of what your policy will be. These factors can include things such as how old your home is, the size, and what items you want covered. The cost can be anywhere from $325-$1000. With that being said, if something was to break, and the home warranty company needs to come out and fix it, there is usually a $75 service call per trip. As per most warranty programs, there are no additional fees to repair an item. You only have to pay for the service call.

What if an appliance needs to be repaired or replaced?

Initially the home warranty company will try and fix the item. If they are unable to repair the appliance and it needs full replacement, they will usually replace the item with one that is similar. By similar we mean, if you originally owned a refrigerator with an ice maker and water dispenser, you will get a replacement fridge with the same features but it may not necessarily be the same brand as your last one. If your last fridge was a better brand and they replaced it with a less expensive brand, the warranty company will give you the cost of the replacement fridge in cash and you can put it towards purchasing the fridge you want on your own.

Where can I buy a home warranty?

Like mentioned before, if the seller is not providing you with a home warranty then you will need to purchase one on your own. There are many companies to choose from, and you can most likely get a free quote online. Take care of this before closing and have your policy take effect the day of closing. When utilized. a home warranty can be the easiest way to take care of home repairs and reduce any added stress that already comes with purchasing a home.

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