The last thing a home buyer wants to worry about after closing is what could possibly break or malfunction in her new home. Since that can cover a multitude of items and systems, for peace of mind, it's a good idea to get a home protection plan. It's especially a good idea to obtain a home warranty if you're a first time homebuyer. A point to keep in mind, the purchase of a Home Warranty does not negate the need for a thorough home inspection before closing. There are certain items that can be caught in an inspection that may be covered under a Home Warranty.
Who Pays for the Home Warranty?
Now, whether the seller pays for the home protection plan and home warranty coverage or whether the buyer pays for it, will depend on your local customs. It varies. In many locales, it's normal for a seller to pay for the coverage because it's a seller benefit. Why? It’s a good selling point and covers them in case something wasn’t covered in disclosures.
How Much does a Home Warranty Cost?
They are fairly inexpensive, typically ranging from $250 to $400, depending on coverage. Home warranty companies sometimes run special sales and either discount policy prices or offer additional coverage for the same price. The policies are prepaid for a year in advance, at which time they expire or can be renewed.
How Do They Operate?
Although specific plans provide for specific types of coverage, most operate the same way.
•If a home system or appliance breaks or stops working, the home owner calls the home warranty company.
•The home warranty company calls a provider with which it has a contract.
•The provider calls the home owner to make an appointment.
•The provider fixes the problem. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance.
•The home owner pays a small service fee.
Types of Coverage
Because all plans differ, you will want to ask specifically what is covered. Ask your real estate agent if upgrades are available. 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.
What If I Disagree With the Diagnosis?
Sometimes a service provider will deny a claim. If that happens or if you are unhappy with the service provided, call your real estate agent and complain. Your real estate agent, if she has a good working relationship with the representative from the home warranty company that is covering your home, well, she can seek resolution for you. Agents all over the country are going to be very upset at this suggestion, but it works. If my client calls me with a problem, I call my rep, and she eventually finds a way to work out a solution acceptable to all the parties involved.
In short, don't take "no" for an answer unless you feel the “no” is reasonable.
What is Not Covered?
•Outdoor items such as sprinklers
•Faucet repairs are not covered under all plans
•Not all plans pay for refrigerators, washers & dryers or garage door openers
•Spa or pools, unless specific coverage requested
•Permit fees
•Haul aways
What Can Cause Denial of Payment?
•Improper maintenance
•Code violations
•Unusual wear and tear
•Improper installation
General Coverage
•Air conditioning
•Dishwashers
•Doorbells
•Furnace / heating
•Water heater
•Ductwork
•Garbage disposal
•Inside plumbing clogs
•Ceiling fans
•Electrical systems
•Range and oven
•Telephone wiring
Because coverages vary from state to state and from policy to policy, ask to see a sample copy of a policy before you commit.
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