Nowadays, many homes in America have a warranty policy to protect the owner’s possessions. If you are buying a new home from a real estate agent or previous owner, it’s recommendable to purchase a warranty policy to complement your existing home insurance cover. This contract covers the costs of repairs and replacement of damaged systems and appliances.
Home insurance vs Home warranty
While both home warranties and insurance cover unforeseen risks, there’s a difference in the two considering that the first case only covers damages caused by typical wear and tear or mechanical breakdown, whereas home insurance is meant for disasters like theft, fire, flooding and natural calamities.
A warranty is designed to meet the expenses of various household items that are not usually covered by home insurance, this is what makes it interesting to many homebuyers.
Property owners can get a warranty regardless of whether they own a condo or house, for instance, if you own a dishwasher, air conditioner or plumbing system they are just as susceptible to damage in a condo as when in a house.
Additionally, though this policy doesn’t form part of your typical home insurance, you can still buy a warranty from the same company that provides your insurance cover. With the growing popularity of warranties, many insurance providers are beginning to offer package incentives that can be added on top of the insurance plan for warranty features. However, ensure that you fully understand the combo policy offered by your insurer before taking the plan.
Always ask your home insurance provider if they have any warranty endorsement that can be added, before making the decision to buy it from somewhere else.
What it covers
Typically, a home warranty will cover many major household components such as your HVAC, water heaters, electrical and plumbing. It can also be used on regular appliances like washers, refrigerators, stoves and dryers. Moreover, some policies allow you to add other optional appliances such as a swimming pool, pumps, a second fridge and even your fridge.
In most cases, home warranties are individually managed so be keen to ask for specifics of the policy you’re considering before committing to the contract. Apart from the above mentioned items, others that can be covered by the home warranty plan include:
a) Ceiling fans
b) Garbage disposals
c) Central vacuums, and
d) Contractor services by experts such as plumbers and electricians
What is not covered
As much as a home warranty is helpful, there are certain items that it usually doesn’t cover. Some of which include:
i) Garage doors and tracks
While the policy may recognize garage door openers, the door and tracks are usually not included in the cover. If in any case you’re worried about your garage door, or just want to change it for aesthetic purposes, then refer to your homeowners insurance or consider paying the expenses out-of-pocket.
ii) Preexisting conditions
Any mechanical problem that was detected during the home inspection stage is regarded as pre-existing, and therefore won’t be covered in the warranty plan. Similarly, if damage is found to be as a result of poor maintenance of your systems then the home warranty won’t cover it.
Most firms will request for a copy of your house inspection form before providing the warranty claim, so ensure that you negotiate mending or replacements of any preexisting conditions in your offer before closing on the home.
iii) Your favorite service contractor
The policy won’t meet expenses of hiring your preferred contractor or plumber for a particular task. If you want more control over who’s allowed to work in your home, ensure that you choose your own service provider within the terms and conditions of your warranty.
What’s the process of claiming a warranty?
The first step is calling your company to report the problem. Next, they will send a technician to conduct inspection and cost evaluation of the damage. He or she will identify the cause of the malfunction and do the necessary repairs upon approval by the company.
To summarize, a home warranty is a great way to secure your home from unexpected systemic and appliance problems. The policy can save you from continuous repairs that can be costly. However, it’s vital to be aware of the clauses found in your home warranty plan before signing up for the offer.