All You Need To Know About Home Warranties

Residential service contracts offer coverage for repairs and maintenance of household systems and appliances. These are called Home Warranties. Home warranties are entirely distinct from homeowners insurance, and they are also distinct from structural warranties, which are applied to new homes by builders and not to existing homes. 

 

The homeowner contacts the home warranty provider if one of their appliances or systems is damaged. In most cases, the warranty company will work closely with a home service provider, such as a plumber or an electrician. Upon receiving a claim notification, the warranty company requests the assistance of one of its partnering contractors, who then assesses the damage and provides a written report to the warranty company.

Coverage Under Home Warranties

Assessing the appliance reveals possible causes of damage and the extent of the damage. The homeowner warranty provider confirms whether the appliance or system is covered by the contract. In case the repairs or replacements are approved, the warrantor employs the contractor.

Home warranty plans are usually designed to cover major appliances like refrigerators, water heaters, and stoves. To understand the coverages and exclusions of a warranty, it is essential to read the fine print. Garage door openers may be covered as part of some warranties' basic coverage, but for others, you may need to pay insurance premiums.

Additionally, some warranty companies may not cover specific components that are not included in basic coverage, even if additional coverage is available. In some cases, outdoor pools and spas are covered by home warranty companies as an added premium, while in others they may not cover pool coverage.

Home Warranty vs. Home Insurance

The premiums, deductibles, claims, and liabilities of a home warranty are similar to those of a home insurance policy, but each policy offers different coverage. The function of household systems can be impaired by wear and tear. Home warranties maintain the functionality of these systems. By contrast, homeowner's insurance covers the cost of replacing or restoring a home if it is damaged by fire or other such natural disasters.

It is possible that the buyer of a property is unaware of how well the previous owner maintained the property. When purchasing household appliances, it may not be possible to obtain information about their age or their useful life years. It may be time-consuming for homeowners to find an experienced handyman. There are two main reasons why homebuyers purchase home warranties: limited time and high costs of property damage.

Qualifications for a Home Warranty

Providers of home warranties may refuse to cover your home for several reasons. The claim may be denied if known damage exists prior to the start of warranty coverage. In this case, the prospective buyer should ask the seller to repair or replace damaged systems or appliances before finalizing the sale if a home inspection conducted before purchase shows damage. Moreover, warranties do not cover products that haven't been properly maintained or installed.

You can purchase a home warranty as a builder, seller, or homeowner. Homebuilders may offer guarantees that cover structural defects for up to 10 years. These could include flooring, walls, roofs, paneling, and more. Warranty coverage may also extend to household appliances and electrical systems for two years. As part of the price of a new home, builders usually include a warranty policy.

It is possible for a seller to add the warranty to an older home in order to encourage the buyer to purchase it. For existing homes, a year's worth of maintenance is typically covered under the warranty. A homeowner can renew the contract after a year.

Costs of Home Warranties

Based on the products included and which ones are added to the home warranty, the average cost of a basic policy ranges between $432 and $816 annually. A homeowners' annual premium is normally accompanied by a contractor fee, also known as a deductible or service call fee. The contractor fee is equivalent to the deductible on an insurance policy. These fees are determined by a variety of factors. Typically, the fees range from $55 to $150.

It is common for policies to include a clause that stipulates the homeowner must pay a lesser amount if a repair or replacement costs less.

Additionally, the homeowner must cover any excess repair or replacement costs if the cost is greater than the contract limit. A home warranty should be analyzed prior to making a purchase to determine which expenses the buyer will be responsible for and whether it is worthwhile.

Tempest Homes - Best Home Builders in Indiana

We are the best Lafayette, Indiana realtors who can assist you in finding move-in-ready homes, huge building lots, or custom-built homes. From design to construction and financing, we assist you every step of the way. Tempest Homes also provides warranty services so you will be protected under any circumstance. In addition to our 30-day service request, we offer you an 11-month service request as well. Get in touch with us today to know more!