What is a Home Warranty?
A warranty usually protects your major systems and appliances. That is why homeowners are allowed to renew their home warranty contracts each year. This allows their property to be always protected.
Before closing a deal, homebuyers are also permitted to buy a home warranty from their real estate agent or a home warranty provider. When you are thinking about buying a home, the more perks that are included, the better the home.
But what does a home warranty cover?
It is possible to have a home warranty that covers the cost of a claim 24/7. If you make a claim, your home warranty may cover the cost of having a qualified service professional come to your property to repair or replace an item for a $50 to $60 service call fee.
You don’t need to get your hands dirty trying to solve mechanical issues when your choice of home warranty coverage can send over a service professional to get the job done.
It can also save you thousands of dollars in unexpected costs, but home warranty coverage varies drastically. Almost all home warranties cover most household appliances and household systems, but some items are generally not included in the warranties.
Read on to find out more about home warranty coverage and how to find an affordable plan.
Home Warranty Coverage
Home warranties are consumer products, not insurance plans. One example of a home warranty company is American Home Shield.
These plans cover the cost of repairing or replacing an appliance or system in your home under certain conditions. Often, homebuyers purchase them simultaneously with the house.
However, if the seller does not include this cost or if you’re a buyer buying a brand-new home or building your own, you may choose to buy a home warranty plan.
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A home warranty is an important option for home buyers, for people who are selling their homes, and for homeowners who just want a little more protection for their systems and appliances.
Each home warranty company has different types of coverage, and even different levels of coverage based on the plan that you purchase. However, there are several commonly covered appliances and systems included in most home warranty plans.
The best way to find out what’s covered in a home warranty plan is to review the contract thoroughly.
For example, Home Warranties Homeowners Insurance Covers might repair or replacement of appliances and home systems due to malfunction or breakdown. Some home warranties might put a limit on some items where they will pay a certain amount for a replacement or repair, and then the rest of the cost must be covered by the homeowner.
Home warranty plans are usually categorized into two broad areas: systems and appliances.
Home Warranty Appliance Coverage
According to the
National Home Service Contract Association, home warranty companies must offer coverage of certain appliances. These include many kitchen and laundry appliances, among others:
- Dishwashers
- Garbage disposals
- Refrigerators
- Ovens, stoves, or other kitchen appliances
- Clothes washer and dryer
- Garage door openers
Do you know that the average repair cost of a refrigerator can run up to $500 while the dishwasher repair cost can run up to $450?
If you have a home warranty, you can avoid paying the high cost of repair process.
Covered Home Systems
If an entire service system in your home stops working randomly or due to natural damage over time, home warranties will cover the expense. These include your:
- Electrical system
- Plumbing system
- Heating system and electric water heater
- Air conditioning systems
- Ductwork
- Interior gas supply lines
- An installed pump used for groundwater
- Sewer lines
- Drain line stoppages
Replacing your air conditioning or heating unit can cost you about $5,000, and fixing a plumbing problem could cost you about $1,000.
If one of your covered systems stops working properly, you should request a service through your member account or by calling the Customer Service Center. The trade service call fee is payable when you make a trade. As soon as they are able, they will send a technician to your home to diagnose the issue.
You can trust that your home is in good hands. With over 4,000,000 service requests under their belt, your home is in good hands.
Optional Coverage
Each plan has different criteria for what appliances it covers. If equipment is not used by both parties, then only one party is covered unless an additional charge is paid.
Depending on what home amenities you have, you can purchase coverage for less common appliances and systems, including:
- Air conditioning and ventilation (these are usually optional)
- Pools and spas
- Pool and spa equipment
- Sump pumps, wells, and septic pump system
- Roof (leak repairs)
- Guesthouse or rental unit
- Doorbells
- Electronics like computers, gaming systems, and smart home systems
- Hot water dispensers
- Tankless water heaters
Sometimes when your dishwasher leaks, homeowners insurance would pay for the water damage but not the dishwasher repairs.
What Does It Not Cover?
A home warranty may help pay for the cost of repairing or replacing a certain type of appliance or system, but the warranty doesn’t necessarily cover all the possible problems that could arise with that item. Every provider’s contract contains provisions that exclude certain types of people from their coverage.
Homeowners’ warranty companies also outline in their contracts the coverage limits and the exclusions of the warranty. That’s why choosing home warranty coverage needs you to carefully read the contract and terms.
When it comes to plumbing, your plan contract may include cover for plumbing leaks, but blockages caused by roots that are outside your home’s structure are not covered.
So, in the end, you need to remember these few points:
It Is Not Homeowners Insurance
Many people immediately think of homeowners insurance when they hear “home warranty.” But the two are not the same. Homeowners’ insurance is property insurance. It covers your belongings in the case of unexpected perils like fires, storms, vandalism, and theft. Home warranties do not function like regular insurance plans and are rather consumer protection plans.
You may have a home warranty, but you will need to use the coverage of your homeowner’s insurance. It is that simple. The warranty covers all of the problems that are expected to occur over time. You would need to cover things like a toilet that leaks and buckles.
It is important that you use the coverage of your homeowner’s insurance because the warranty is only intended to cover ordinary failures of homes and appliances.
You need to understand what wear and tear are. This means that a home warranty does not cover any unexpected events, e.g., any damage resulting from those appliance failures. You might also turn to homeowners insurance in the event that something bad happens to your house because of fire, theft, hail, wind, electricity outages, power surges, and lightning strikes.
Improper Maintenance
Some home warranty companies will refute coverage in the case of improper maintenance. Even if there was a home inspection, as is the case with the majority of home sales, they can try to use an improper maintenance claim.
If there is evidence of the previous owner failing to upkeep home systems and appliances, a home warranty company can cite this as a reason to not repair or replace the damaged system or appliance. This is why it becomes important to find a reputable home warranty company that will be transparent in the contract and fair in their service.
There are still some exceptions. For a monthly or annual premium, a home warranty can repair or replace all kinds of appliances and systems that have malfunctioned or broken down due to normal wear and tear.
Service Fees
Much like insurance plans, the coverage does not cover every single expense. The main out-of-pocket cost of a home warranty is the service call fee. When an appliance breaks down, there will be a small upfront fee to pay the repair person. However, it should make up for the cost when you are paying $75-100 for a service fee rather than $1,500 to buy a whole new appliance.
You must view the complete limits of liability and any exclusions the companies might have. There are also payout limits and policy periods you should pay attention to.
Some companies also have aggregate limits on the amount that they will pay to any party with a claim. The time period is usually one year each.
Why Purchase a Home Warranty?
Home warranty coverage is a great way to protect you from having to pay full price for new home systems and appliances. It can be a lifesaver in the case that you need to repair or replace something due to natural wear and tear. For these reasons, home warranties can grant homeowners the necessary peace of mind.
Many home warranty companies offer great customer service and include plenty of covered items. The way these warranties work is that the home warranty company generally has contracts with accredited service companies to help you out when you are in need.
A home warranty contract can be very convenient for this reason. Because the warranty company already has a service contract with electricians, plumbers, and appliance technicians, for example, you will not have to scour the internet to find a trustworthy company.
Shop For The Best Home Warranty Insurance
There are many reasons to pay for a home protection warranty. One of them is that it saves money on one-off purchases, gives you convenience, and it gives you peace of mind. But one that is especially important for first-time home buyers. You do not want to be left deciding whether you should buy a new washer two weeks after you move in.
Not all home warranties are created equal. Different companies cover different appliances and coverage terms. It is important to shop around before committing to a home warranty that might not have the right coverage for you.
Shiirs is here to help you identify the best deals and most trusted companies for your home warranty.
Contact Shiirs today to learn how we can help and for additional information. Most companies will offer you a free sample contract before you have to commit to buying a plan.
Click here to get your free home warranty quotes today!
