Purchasing a home warranty should be considered when buying a new home. Warranties are generally seen as beneficial because they cover unpredicted repairs.
How does it work? Here are the basics
1. What is a home warranty?
A home warranty is an annual service contract. It can cover such items as appliances, plumbing, and HVAC systems that can need repair or replacement over time. Home warranty coverage will vary from company to company. When getting home warranty coverage, you must be clear on what’s included in the coverage.
2. What do I do when I need to use my warranty?
- Call the home warranty company when a home system or appliance breaks down or stops working.
- They will call a service provider they have a business arrangement with regarding what needs attention in your home.
- 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.
3. What is not covered?
Check your policy, but in general:
- Faucets
- Outdoor items such as sprinklers
- Spas and pools, unless specific coverage requested
- Refrigerators, washers, dryers, and garage door openers
4. What can cause a denial of a claim?
Things such as improper maintenance, code violations, unusual wear-and-tear, or improper installation are reasons claims can end up being denied.
5. What is the general coverage?
Review your policy and coverage carefully. Each insurance company has special offers or packages. General coverage usually includes the following:
- Dishwashers
- Doorbells
- Air conditioning
- Furnace/heating systems
- Water heaters
- Ductwork
- Garbage disposals
- Ceiling fans
- Inside plumbing stoppages
- Electrical systemsRange and oven
Be sure to read thoroughly and understand your warranty. Before signing anything, ask questions and clarify anything you don't understand.
