What is a Home Warranty?
A home warranty is a contract between you and a company that guarantees repairs or replacements to certain parts of your home. It can be helpful to have a home warranty if something breaks in your home since you will not have to pay for the repairs out of pocket.
Plus, home warranties can be a great way to peace of mind. Knowing that you have coverage for your appliances, electrical, and plumbing systems can give homeowners insurance by knowing that they are protected in the event of a problem.
In this guide, we will discuss what a home warranty is and how it can benefit you.
Do You Need a Home Warranty?
The answer to this question depends on a few factors.
First, you should ask yourself if you are comfortable paying for repairs out of pocket in the event that something breaks. If the answer is no, then you probably need a home warranty.
Additionally, you should consider how often your home experiences problems. If your home is older or has known issues, you are more likely to need a home warranty. A lot of times, a realtor will push that you get a home warranty.
Lastly, think about how much coverage you want. There are different levels of home warranties, so be sure to choose one that fits your needs.
The Benefits of a Home Warranty
Like all warranties, a home warranty cover is supposed to give you peace of mind. In the event that something breaks in your home, you do not have to worry about paying for the repairs yourself.
Here are some other benefits of a home warranty:
Appliance coverage
Most home warranties cover most major appliances, such as your refrigerator, dishwasher, oven, and washer and dryer.
Electrical coverage
If an electrical problem arises in your home, a home warranty can help cover the costs of repairing it.
Plumbing coverage
A plumbing issue can be a huge headache. A home warranty can help you cover the costs of repairing or replacing your plumbing system.
Peace of mind
As mentioned before, a home warranty can give you peace of mind. Knowing that you have coverage for your appliances, electrical, and plumbing systems can help alleviate some of the stress that comes with owning a home.
What To Consider Before You Buy A Home Warranty
It’s also critical to thoroughly read the contract before you sign up for a home warranty. Here are some things to keep in mind:
The company’s reputation
Do your research and make sure that the company you are buying a policy from has a good reputation.
Coverage Limitations
Make sure you understand what is and is not covered by your home warranty policy.
The deductible
The deductible is the amount of money you have to pay out of pocket before the warranty company will start paying for repairs.
Exclusions
As mentioned earlier, there are some things that are not covered by a home warranty policy. Make sure you know what they are.
Waiting Period
Most home warranties have a waiting period before they go into effect. Make sure you are aware of how long you will need to wait before your policy starts covering repairs.
9 Things NOT Covered by Your Home Warranty
Home warranties don’t usually cover pre-existing conditions, damage caused by neglect or misuse, and common items that are not covered under the specific policy.
1
Windows, walls, and doors
These are generally not covered by home warranties.
2
The roof
The roof is another part of the house that is usually not covered.
3
Pests
If you have a pest infestation, it is unlikely that the warranty will cover the cost of getting rid of them.
4
Swimming pools and spas
These are often excluded from home warranty policies.
5
Pre-existing conditions
If your home has a problem when you buy the warranty, it is not likely to be covered.
6
Damage caused by neglect or misuse
If you ignore warnings about using too much water or putting inappropriate items in your garbage disposal, for example, and then something breaks, the damage will not be covered.
7
Sprinkler systems
These are often not covered by home warranties.
8
The land on which your house stands
If something goes wrong with the foundation or the soil, the home warranty companies will not be responsible.
9
The service provider of your choice
It is possible that you will not get to select the service provider that services your repairs. If you want control of your service provider on your home warranty, then you will need to negotiate that directly with the home warranty company. However, these companies typically have their own lists of vetted and approved service providers you must choose from.
7 Reasons Your Home Warranty Claim May Be Denied
Even if you have a home warranty policy, there are some things that might not be covered. Here are eight reasons your home warranty claim might be denied:
1
You did not follow the manufacturer’s instructions for using the product.
2
The damage was caused by natural disasters, like a flood or a hurricane.
3
The damage was caused by an act of war.
4
You didn’t have the item serviced according to the manufacturer’s recommendations.
5
You didn’t get the proper permits when you made changes or repairs to your home.
6
The item is not covered under your policy.
7
Your policy has expired.
What Does a Home Warranty Cost?
The cost of a home warranty policy varies depending on the company you choose and the type of coverage you select. You can always find cheap home warranty companies. Typically, though, it costs between $300 and $600 per year.
Also, there is usually a deductible service fee of $50 to $100 per repair. So, if your dishwasher breaks and the cost of repairs is $400, you would have to pay the first service fees of $100 yourself, and the home warranty company would cover the rest.
What is the difference between homeowners insurance and a home warranty?
Homeowners insurance protects you from financial loss in the event of a natural disaster or another unforeseen event, like a fire.
A home warranty, on the other hand, covers the cost of repairs or replacements for appliances and systems in your home that break down due to normal wear and tear.
Is a home warranty a protection plan?
Some people refer to home warranties as protection plans, but they are not the same thing. A home warranty is a policy that provides coverage for appliances, plumbing, and electrical systems in your home.
Protection plans are typically insurance policies that cover losses from natural disasters or other unforeseen events.
How do you File a Home Warranty Claim?
Filing a home warranty claim is easy. Here’s what you need to do:
Step #1
Call the home warranty company and tell them about the problem.
Step #2
The home warranty company will send a technician to your home to assess the damage.
Step #3
If the technician determines that the problem is covered under your policy, they will repair or replace the damaged item. If they determine it is not covered, then your claim will be denied.
Frequently Asked Questions
1
Is voiding a warranty legal?
It depends on the state. Some states allow companies to void warranties if the customer misuses the product, while others do not.
2
Can I file a home warranty claim for appliances that are outside of the house?
Generally, no. Home warranties only cover systems and appliances that are inside of your home.
3
Can I file a claim for something that was not covered by the policy?
No. If an appliance or system is not included in your home warranty policy, you cannot file a claim for repairs or replacements.
4
Is a home warranty a waste of money?
It depends on your needs and the coverage that you select. Home warranties can be a great way to protect your appliances, plumbing, and electrical systems from costly repairs or replacements. Before taking out a policy, however, it’s important to understand what is and is not covered.
5
How do you know if you have a home warranty?
Typically, home warranties are included in the purchase contract when you buy a new home.
6
How long is a home warranty good?
Home warranties usually last for one year. However, it’s important to read the terms and conditions of your specific policy to be sure.
7
Does the home warranty provider have to be licensed?
Yes. All home warranty providers must be licensed in the state where they do business.
Home warranty policies can be a great way to protect your appliances, plumbing, and electrical systems from costly repairs or replacements. Before taking out a policy, however, it’s essential to understand what exactly is covered and what is not covered.
If you have any questions about home warranties or filing claims, please contact the customer service department of your home warranty company.