Most Commonly Asked Questions about Home Warranty

What is a Home Warranty?

Similar to a warranty you get with the purchase of a new appliance or piece of equipment, home warranties, or service contracts, cover home appliances and system repairs. Home warranties protect homeowners from the high cost of unexpected appliance breakdowns and system failures, and provide protection not just for your home, but for your budget and time as well.  

How do they work?

As a homeowner, you never know when essential systems or appliances such as your plumbing or refrigerator may break, and repairing them can be time consuming and costly. Home warranties are there to offer peace of mind by ensuring you’ll be taken care of by certified professionals when the unexpected occurs.
As long as your home’s systems are in good working order prior to a home warranty purchase, these contracts will provide timely and effective repair or replacement services for entities covered bythe contracts stipulations. By paying an annual contract fee, you will enjoy repair and replacement services for covered home essentials in a timely, cost effective, and efficient manner.  

How can they help?

Though your home's systems and appliances may be in good working order today, with normal usage and wear and tear, at some point they will need to be either repaired or replaced. When that time comes, you may find yourself faced with having to pay an exorbitant amount of money to repair or replace them, potentially causing a serious financial setback.
To offset these sometimes unpredictable costs, a home warranty service allows you to control the cost of home repairs. Rather than spending money on surprise repairs or replacements, or agonizing over what repairman to hire, you can rest assured knowing that everything will be taken care of with your annual contract fee.

A home warranty can provide peace of mind. The last thing a home buyer wants to worry about after closing is what could possibly break or malfunction in her new home. Since that can cover a multitude of items and systems, for peace of mind, it's a good idea to get a home protection plan. It's especially a good idea to obtain a home warranty if you're a first-time home buyer with no experience maintaining a home.

WHO PAYS FOR THE HOME WARRANTY PLAN?

Now, whether the seller pays for the home protection plan and home warranty coverage or whether the buyer pays for it, will depend on your local customs. It varies. In many locales, it's normal for a seller to pay for the coverage because it's a seller benefit. Why? Because then the buyer won't be calling the seller after closing if something breaks. 

How Much Does a Home Warranty Cost?

They are fairly inexpensive, typically ranging from $400 to $700, depending on coverage. Home warranty companies sometimes run special sales and either discount policy prices or offer additional coverage for the same price. The policies are prepaid for a year in advance, at which time they expire and can be renewed by the homeowner at a slightly higher fee.

How Do They Work?

Although specific plans provide for specific types of coverage, most operate in a similar manner and contain common verbiage.  If a home system or appliance breaks or stops working, the home owner calls the home warranty company.  The home warranty company calls a provider with which it has a business arrangement.  The specific provider calls the home owner to make an appointment.  The provider fixes the problem. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance.  The homeowner then pays a small trade service fee for the visit (less than $100).

Types of Coverage

Because all plans differ, you will want to ask specifically what is covered. Ask your real estate agent if upgrades are available.  Pay close attention to whether the home warranty company will pay for repairs to make certain types of systems or appliances compliant with new regulations.

What if I Disagree With the Outcome?

Sometimes a service provider will deny a claim. (See below.) If that happens or if you are unhappy with the service provided, call your real estate agent and complain. Your real estate agent, if she has a good working relationship with the representative from the home warranty company that is covering your home, well, she can seek resolution for you. Agents all over the country might be very upset at this suggestion, but it works. If my client calls me with a problem, I call my home warranty rep, and she eventually finds a way to work out a solution acceptable to all the parties involved.

In short, don't take "no" for an answer! Call your real estate agent. Your agent might have leverage.

What Is Not Covered?

• Outdoor items such as sprinklers.  
• Faucet repairs are not covered under all plans.  
• Not all plans pay for refrigerators, washers & dryers or garage door openers.  
• Spa or pools, unless specific coverage requested

• Permit fees
• Haul-aways
• Items broken prior to closing
• Exclusions noted in policy

What Can Cause Denial of Payment?

This is the thing that upsets a lot of buyers after closing, when they are denied services for a repair. Sometimes it can seem like the company is actively looking for a way not to reimburse the homeowner, and that assumption, at times, can be accurate.

• Improper maintenance
• Pre-existing condition disclosed in a home inspection
• Code violations
• Unusual wear and tear
• Improper installation

General Coverage in a Home Warranty

• Air conditioning
• Dishwashers
• Doorbells
• Furnace / heating
• Water heater
• Ductwork (to code)
• Garbage disposal
• Inside plumbing stoppages
• Ceiling fans
• Electrical systems