A home warranty is a home protection plan that you can purchase to secure you in case of break or malfunction in your new home. If you are a first time home owner, this is especially necessary.
Who pays for the home warranty?
Home warranties are usually paid for by the seller for the 1st year of purchase and then can be renewed by the buyer for each year thereafter.
How Much does a Home Warranty Cost?
Home warranties can cost anywhere from $300.00 - $500.00/ year.
How Do They Work?
For all appliances/parts that are covered:
Call the home warranty company and log in a complaint with details.
The home warranty company gives the name and number of the service provider that they will assign you.
The service provider calls you when they get the work order from the warranty company and confirm a time to provide service.
The home owner pays a minimal fee ranging from $40.00-$50.00 per visit. This fee is the only monetary obligation that the home owner has at this time.
Things to know about Home Warranties:
Make sure you know what is covered and what is not. For eg: Problem: A faulty garage door. The home warranty company might cover the motor, but not the spring that the door is attached to or the door itself. Therefore, ask detailed questions when logging your complaint.
The following are 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
The following can cause denial of Payment:
- Improper maintenance
- Code violations
- Unusual wear and tear
- Improper installationGeneral Coverage
- Air conditioning
- Dishwashers
- Doorbells
- Furnace / heating
- Water heater
- Ductwork
- Garbage disposal
- Inside plumbing stoppages
- Ceiling fans
- Electrical systems
- Range and oven
- Telephone wiring
It is important to keep in mind that a home warranty is not an insurance policy, and is not regulated by the insurance commission in your state. Thus, the fine print of the warranty is very important to the seller or buyer before signing the bottom line. Most importantly is that it's going to cover mechanical problems in the house that your homeowners insurance may not cover.
Bottom line is : you have put so much time, money and effort into buying this perfect little (or not so little!) dream house ... the least you can do is pay the couple of hundred extra into protecting it. You might have to pay a bigger amount in case something does break!!!
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