A Brief Guide to Home Warranties

Homeowners consider the advantages of buying a home warranty regardless of how old the property is. The warranty gives them coverage for a variety of installations inside the property. This includes vital services such as the heating, cooling, and ventilation systems. If these systems fail, the homeowner gets coverage through a warranty for the costs, but the coverage isn’t the same as a homeowner’s insurance policy. There are major differences between a home warranty and a homeowner’s insurance policy. Comparing these differences prevents the homeowner from making mistakes and corrected misconceptions about the warranty.

What Does a Home Warranty Do for the Owner?

The home warranty provides protection for HVAC, wiring, plumbing, and all major appliances inside the property. If any of these systems or products become faulty, the warrant provides coverage that offers professional repair or replacement services. It doesn’t provide funds to pay for the repairs or replacements like a homeowner’s insurance policy. However, the homeowner’s insurance will not provide repairs for appliances and some installations unless the homeowner has a rider for the specific item. The warranty gives them supplemental coverage to help the owner get repairs and replacements when needed. Homeowners can contact a home warranty company to learn more about buying a homeowner’s warranty right now.

Does the Size of the Property Affect the Cost?

Yes, the size of the property will affect the cost of the home warranty. Typically, residential properties won’t present an excessive cost for the warranty unless it exceeds about 5,000 square feet. Property owners who have additional structures such as pool houses and guest homes will need an additional warranty for the separate property. Each of the properties will be assessed by the home warranty company before they calculate the annual fees for the home warranty.

Do You Have to Pay a Deductible for the Warranty?

Yes, the property owner will have to pay an annual deductible before they receive any coverage through the home warranty. It is similar to an insurance policy, and the homeowner will be responsible for paying these additional charges before they get coverage.

Does the Homeowner Set Up the Repairs or Replacement Services?

No, the homeowner will not have to contact a repair or replacement service themselves. They contact the home warranty company and explain the issue. The home warranty company sets up all repairs and replacement services for them. Some warranty companies require the homeowner to use service providers listed in the contract. This could limit the coverage to specific service providers that are within their network. The homeowner can review the terms of their warranty to determine if their preferred service providers are available through the contract.

Saving the Homeowner Time and Guaranteeing Services

A professional will come to the home and fix the problem for the homeowners, and the homeowners don’t have to waste time contacting service providers and comparing prices. The warranty company provides a list of service providers and prices for the homeowner. The homeowner can choose their own service provider if they want. All services are completed by a professional, and the services are guaranteed. If the service provider doesn’t repair the system to the homeowner’s expectations, the homeowner contacts the warranty company to correct the issue. The warranty company will not send service providers that lack experience in their industry, and all service providers are licensed and bonded.

The Warranty Reduces the Cost of the Repairs

The terms of the home warranty define what discounts are available to the homeowner. Using a home warranty reduces the full cost of the repairs or replacements. For example, if the electrical wiring becomes faulty, the warranty provides an electrician at a more affordable price who will complete the new electrical wiring installation. If the HVAC system exceeds its expected longevity, the warranty provides assistance with a new HVAC installation.

The warranty will not pay the full cost of the repairs or replacements like a homeowner’s insurance policy or a rider. When reviewing the terms of the warranty, the homeowner must consider what fixtures are included and how much coverage they will get for each appliance or installation.

Understanding Exclusions from Coverage

There are exclusions for the home warranty, and the homeowner must differentiate between what is and isn’t covered. Unlike a homeowner’s insurance policy, the homeowner doesn’t have to wait for a covered event to get coverage. However, they won’t get a direct payment for all damaged items in the home. The home warranty will not cover the cost of roofing repairs unless the warranty specifically identifies the roof in its covered items. The exclusions are listed in the home warranty, and the homeowner must add items according to the terms of the contract.

What is Properly Maintained and How Does It Affect the Warranty?

“Properly maintained” means the homeowner followed the manufacturer’s instructions when maintaining the item listed in the warranty. If the homeowner doesn’t maintain any appliance or fixture covered by the warranty, the warranty company can deny coverage. When the homeowner contacts the warranty company, a service provider will review the item and determine if the homeowner has maintained the item properly. If they have failed to complete the necessary maintenance tasks, the homeowner loses coverage for the item even if they have paid their annual fees. The home warranty gives the property owner assistance for maintaining these items.

Homeowners explore the opportunity that a home warranty provides. The warranty is similar to an insurance policy, but it doesn’t provide the coverage that a homeowner’s insurance policy gives the homeowner. A homeowner’s insurance policy could replace the property and pay the full cost of property damage repairs. A home warranty doesn’t provide the same type of coverage. It applies to specific installations in the property, such as the wiring or the plumbing. Warranties give the homeowners discounted rates for repairs and replacement services, and the homeowner must contact the warranty company when they need services. Reviewing the terms of a home warranty shows the homeowner what to expect from the warranty’s coverage.

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