You bought a home with a home warranty, but now what? Do you know what you get out of it? Not all home repairs fall under the warranty coverage, but many do. Learn which repair costs you may be able to get reimbursed from your warranty company.
Each Warranty is Different
Don’t assume that a home warranty is one-size-fits-all. You need a warranty that covers the items you want covered. A few examples of your choices include:
- HVAC systems
- Electrical systems
Don’t assume that the warranty plan you choose covers all of these things – instead, ask specific questions. For example, if you want coverage for your dishwasher or washer/dryer, you need to ask about coverage. Each warranty company offers different plan levels that cover different things.
Appliances are Typically Covered
If you opt for appliance coverage, know what the warranty covers and doesn’t cover. Typically, normal wear and tear falls under the warranty’s coverage. Most warranties cover the parts and labor, but it may depend on the reason for the repair. For example, if you used the appliance incorrectly, you may be responsible for the cost of repairs.
Warranty companies may also exclude certain models or types of appliances. For example, free-standing freezers and wine chillers may be excluded from refrigerator coverage.
Home Systems are Covered
Home warranties typically cover whole house systems too. The largest systems are electrical, plumbing, and HVAC systems. These systems typically cost the most to repair/replace, so ensuring that you have great coverage for these systems usually provides the best bang for your buck.
Other common systems for home warranty coverage include:
- Water heaters
- Ceiling fans
- Garbage disposals
- Central vacuum
The systems you have in your home will determine the type of warranty you need. Obviously, all homes have plumbing and electrical systems, but only some homes have garbage disposals and central vacuum, for example. Paying for coverage you don’t need is a waste of money, so read the fine print and pick and choose the coverage you need.
A Home Warranty Isn’t the Same as Homeowners Insurance
Many people make this mistake. Homeowners insurance covers you in the event of a disaster, such as a hurricane or hailstorm that breaks windows, throws a tree on your house, or damages your roof. Homeowners insurance doesn’t cover repairs your home needs as a result of normal wear and tear.
A home warranty, on the other hand, provides the coverage you need for normal wear and tear. The right home warranty covers the major systems in your home as well as any appliances that you want covered. When these systems or appliances break down, a home warranty provides financial assistance to repair/replace them.
You Must Put Forth Good Faith
Home warranty companies don’t require a home inspection or any type of inspection before you can buy the warranty. However, they do require you to operate in good faith. You must have the covered appliances or systems properly installed and you must properly maintain them. If the appliances or systems are in poor working condition at the time that you purchase the warranty, the warranty company may exclude them from coverage.
You’ll Pay a Service Fee
Even with home warranty coverage, you will pay a service fee for each call. Some companies call it a trade service fee. You pay the contractor at the time of service and the amount varies based on the repair that you need. Typically, if the repair requires more than one service call, you only pay one service fee total.
Home Warranties aren’t Expensive
On average, you can expect to pay between $300 for a basic home warranty and $600 for a top-of-the-line warranty. Oftentimes, buyers can negotiate a home warranty into the purchase contract, getting the seller to pay for it. The home warranty gives the buyer a little reassurance that they won’t go broke fixing up the home after buying it if things fall apart.
Home warranties are a great way to supplement what your homeowner’s insurance covers or even the manufacturer’s warranty on things like your appliances and home systems. Manufacturer’s warranties typically only cover parts, not labor. Home warranties cover both, giving you peace of mind that you won’t have to dig into your savings account every time something breaks in your house that falls under the warranty’s coverage.