A Quick Guide To Home Warranty

Home is where thy heart is, and there is no greater pleasure than coming back to the place where you belong. But a leaky tap or a broken air conditioner can ruin it all. Buying a home is a huge investment and maintaining it is  equally taxing. Appliance breakdown or plumbing issues not only burn a hole in your pocket but also ruins your peace of mind. Home warranty can be the tool that can make your life hassle free.

What Is a Home Warranty Plan?

Home warranty is a service contract that promises to repair or replace damaged appliances and systems, provided it meets the terms and conditions of the deal.

Guide To Home Warranty

A warranty differs from a general homeowner’s insurance policy in that it covers repairs and replacements of faulty appliances or systems whereas homeowner’s insurance covers your home and its contents from uncertain events  such as loss, theft, and destruction. Home warranty is different from a manufacturer’s warranty as well.

Should You Buy A Home Warranty?

If your appliances and systems are no longer under the manufacturer’s warranty or you just want the added peace of mind, then yes a home warranty could save you money in the long run and cover the maintenance that your home insurance does not.

What is covered?

In home warranty, coverage depends on the value of purchase. In this case, the more the merrier. The coverage groups the appliances into different categories. The following are usually covered in a first-tier or second-tier plan offered by home warranty companies. For a complete list, check what is covered in a home service contract article.

Major appliances

These generally include appliances such as an oven, refrigerator, dishwasher, garbage disposal, microwave, washing machine, clothes dryer and ceiling fans.

Heating and cooling systems

These usually include furnaces, air conditioners, heat pumps and ductwork. However, portable air conditioners and heaters are not always covered.

Plumbing

It includes indoor pipes and drains, faucets, swimming pools and hot tubs.

Electrical systems

Covers electrical panels, wiring, garage door openers and door bells.

Are you a homeowner? a home buyer? a seller? or a real estate professional? It does not matter which end of the deal you are at. Home warranty is bound to benefit all.

Homeowner And Buyer Benefits

A perfect home protected by a home warranty is like a cherry on the icing. It provides peace of mind to the homeowner who otherwise might not be able to meet unexpected repair bills when one has already invested a lot on a house. The benefits of a home warranty plan include:                                                                                                           benefits

  • Cash flow protection on unexpected repair and replacement of appliances.
  • One call and a nominal fee, the issue is sorted.
  • No need to screen and follow up with contractors and other professionals.
  • Most major systems and appliances are covered under the standard plan.
  • Provides ongoing home protection, renewable year after year.

Seller Benefits

A property with a home warranty can generate greater demand. Homes listed with a home warranty are more attractive to potential buyers, and tend to sell faster and often fetch a good price. The benefits of a home warranty for a seller are:-

  • Appliance protection plan as an incentive to attract buyers.
  • Minimal cost premium not paid until closing.
  • Budget/cash flow protection on unexpected repairs.
  • Reduced after sale worries. This means, if a breakdown happens after closing the deal, buyers will call the warranty company not the seller.

Real Estate Professionals Benefits

A home warranty is a very important aspect of the real estate transaction providing many benefits during the marketing period, while the home is under contract and after the close of sale:-

  • Homes with home warranties tend to sell faster and closer to the asking price – minimizing marketing efforts.
  • Reduced after sale hassles – when a buyer experiences a breakdown, they call the warranty company, not the agent.
  • Satisfied clients will generate increased repeat/referral business.

How Do I Select A Home Warranty Plan?

A number of different companies offer home warranty plans. Regardless of who pays for the policy, the buyers should review the coverage from various companies and select the one which suits the best. Read the fine print carefully to spot coverage limitations and exclusions. Be sure to get a home warranty plan that covers “pre-existing conditions” which were not known to the sellers or their agent. Pre-existing defects that were known are excluded from coverage.

Possible Exclusions In A Home Warranty Plan

home warranty exclusions

A home warranty can cover almost all your household appliances and systems, as long as you are prepared to pay for a high level of coverage. Warranties generally do not cover things such as permit fees or hauling fees, nor cosmetic structures that are part of your appliances that can easily be replaced, such as: oven rotisseries, broiling and baking attachments, refrigerator shelves and bins and water filtering devices. Here is a list of possible exclusions which you need to be careful about.

 Structural Problems

Warranties do not cover any structural problems in your home, such as a crack in the basement wall or a leaky roof.

Pre-existing Problems

Even for the things that are covered, a home warranty company will not usually agree to repair or replace appliances or systems that had pre-existing problems at the time when you obtained the warranty.

Lack of Maintenance

The company may not be willing to repair items that were improperly maintained or installed or that violate building codes.

Hidden charges

Take note of any extra fees. Some home warranty contracts charge extra fees in addition to the deductible, including service fees and missed appointment fees.

Limited number of claims

Improper previous repairs, pre-existing problems and more are excluded from coverage. Also, some companies may limit the number of claims you can file.

The pain of finding a repair person or replacing your appliances can be avoided with a home warranty plan. It can free you from the financial burden of expensive repairs and replacements. But, we provide you reviews on companies by many homeowners, homebuyers and real estate professionals. This will aid your efforts to choose the right company suiting your needs. Want to receive quotes from a list of companies? Just provide your zip code and address and the job is done! This means no waste of time in signing up.

Like any other insurance, home warranty is also bound by clauses, therefore read the fine print and make yourself aware about the hidden clauses to make best use of the deal.


Recent Comments
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Larry Raymey
03-05-2016
Home warranty companies are a joke. Examples of the 2 homes i had. The shower head fell off. They said the pipes were preexisting issue and not covered. The pool heater went out. Again not covered preexisting issue to old of a heater, had a sike pipe break and water was rushing in, i called and they said it would be 4 days before they could get out. I had to get another plumbing company to fix and they said not covered because it was not there approved contacter. Had a water heater go out again not coved under it was not installed property. Dish washer went out. Again pre existing not covered. Had a leakie pipe in bathroom they said they would fix the pipe but non of the tile, wall cut out or repair. Could go on but you get the idea. Save the 500 and use it for your own repair. They only cover about 10 per.
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17-02-2016
[…] money for frequent and costly repairs should get a home warranty. You may want to look into our guide to buying home warranty plan for more information on this topic. Here’s who needs a home […]
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aruna ravani
12-07-2015
Please dont buy home warranty from one guard they send tech that is just parts changer no customer service.when you say you want to speak with supervisior. First no body calls you back when you call put you on hold finally when youspeak with them she told me you can cancel your policy .they dont care for there customer.thry will just full inocent buyers.
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Karen
19-01-2015
I told my realtor I wanted a home warranty when she asked. Now that our hot water heater is out 5 months later, I find out I didn't get one. Who's liable? If its me, then what's the point of having a realtor?
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marco
23-09-2014
After 5 years experience with home insurance on 2 properties on lease , 5 and 15 years old, I decided to downgrade the coverage to appliances only. My experience is they do well for small and localized failures, but when it comes to A/C units or garage doors where maintenance can be an issue, contractors go right away on that, declining coverage, even if not true. Recently I had a contractor coming out 3 times for a condensing unit fan damaged, claiming on dirty coils and refusing to do the job under coverage. Had to pay another tech by myself plus service fees , ending spending more than without a coverage plus time wasted/frustration of my tenants. Unfortunately I live a thousand miles from properties, ideally homeowner must be present at all repairs.
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Cost Of Home and Appliance Maintenance Plans
20-09-2014
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MIke Tower
07-07-2014
We purchased our 12 year old condo in March of 2014. On the advice of our realtor we requested the seller include a one year home warranty...she suggested One Guard. Since then we have experienced a circuit breaker failure, a failed condenser cooling fan in our SubZero refrigerator, and a leak in our LG front load washing machine. Each claim was handled quickly and professionally. The repair people they selected were excellent and provided fast and professional services. I would strongly recommend One Guard.
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01-04-2014
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18-12-2013
[…] For those of you who feel that you don’t know enough about home warranties and matters related to it, we suggest that you go through What is Home Warranty section. […]
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Frustrated
25-06-2013
One Guard is a terrible, terrible joke of a warranty company. I implore you, if you have any decency in your heart, do not use this company. They will send ignorant technicians to your house, they will bill you for each and every service call even if the "technician" doesn't accomplish anything, they will ignore common sense and morality all in the name of saving themselves a dollar. A typical plumber will charge 70$ for a service call, One Guard plumbers (who the roto rooter guy said was garbage) charge 55$ . Is it really worth the whopping 15 dollars saved to have a warranty when the plumber they sent didn't fix anything? But One Guard was very adamant about getting their money, despite the problem not being fixed. Don't fall for their lies, the company is a joke. 90% of the reviews I've found on all these sites say the same thing. One Guard is not worth the money.
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