HOME WARRANTY COVERAGE

WHAT TO EXPECT IN A NEW HOME WARRANTY?

Home warranties may be procured when purchasing a new or pre-owned home by a landowner, seller, or investor. The terms of its contract decide each company’s coverage. Basic home warranties usually cover the parts and labor on repair or replacement of chief home systems and equipment and some code upgrades.

Most home warranty firms provide a variety of plans. These offer different coverage levels, so be sure to study any warranty contract details before purchasing. Even if you decide to renew the warranty contract from year-to-year, double-check your plan’s details as there is a possibility of the coverage changing every year.

TYPES OF HOME WARRANTY COVERAGE

As home warranty plans differ, you have to check what is covered under your plan. Inquire with your real estate agent to find out if upgrades are available.

Home warranty companies have three types of coverage – basic coverage, enhanced coverage, and optional coverage. Some companies may not have basic coverage but a standard policy instead.

Not all companies include the same items in their standard policy. Once you know what the covered items under a particular category are, the next step is to opt for a plan that suits your home. Home warranty plans can be classified based on the number of items that are protected.

1) BASIC COVERAGE

Basic plans cover just a limited number of devices and are ideal for homeowners who want limited coverage. A basic home warranty coverage includes major systems and everyday use appliances.

The items covered in a home warranty plan can also differ from state to state. The everyday use of appliances varies depending on climate conditions and other factors—for example, the plumbing system, electrical system, ceiling fans, refrigerator, etc.

2) ENHANCED COVERAGE

The enhanced coverage includes specific systems and appliances commonly used along with the devices from the basic plan. An enhanced coverage costs slightly more than basic coverage. Your HVAC, microwave, washer/dryer, etc., and other major appliances are not included in the basic coverage in certain home warranty policies.

3) BUILD-YOUR-OWN COVERAGE

This plan is perfect if you want coverage for devices of your choice. It allows you to customize coverage for appliances or systems that you deem necessary. It is ideal for homeowners looking out for a tailor-made plan or combo plan.

4) OPTIONAL COVERAGE

Optional coverage includes those items that are not covered under the basic or enhanced plans. These are not the common appliances that most households have. This coverage gives you the option of adding your pool, spa, wine cooler, well pump, etc., to your home warranty policy. You need to pay a fixed extra premium to put optional add-ons in your home warranty policy.

OPTIONAL COVERAGE ITEMS TYPICALLY INCLUDE:

• Spa
• Swimming Pool- pump and others
• Roof Leak
• Septic system
• Stand Alone Freezer
• Second air conditioner
• Second fridge/freezer
• Wine cooler
• Additional spa
• Wet bar fridge
• Code Upgrades
• Water Filtration System
• Booster Pump
• External Plumbing
• Ornamental Fountain Motor
• Solar Hot Water System/Equipment
• HVAC Tune-up

WHAT ITEMS ARE NOT COVERED IN BASIC AND ENHANCED HOME WARRANTY PLANS?

Contracts only cover specific parts, appliances, and systems, while all the rest is excluded. You may opt to pay an extra premium to cover items that are not already in a standard plan before signing the contract.

• Faucet repairs (unless otherwise stated in the policy)
• Hot tubs (you can request/add this coverage in some cases)
• Outdoor items such as sprinklers
• Whirlpool bathtub (you can request/add this coverage in some cases)
• Hauling away debris
• Hauling away old appliances
• Outdoor water systems
• Combo ceiling fans
• Food spoilage
• Booster pump
• Home entertainment
• Office package
• Extended pipe leak coverage
• Accessories for appliances- shelves, racks, doors, etc.
• Light Fixtures
• Remote Controls
• Gas A/C, Window Units

HOW MUCH DOES A HOME WARRANTY COST?

Annual premiums of home warranties range from $300-$600. If your annual systems and appliances maintenance costs exceed this amount, a home warranty plan will be a prudent investment for saving your budget.

The service call fee or a deductible of a home warranty ranges from $50-$125. Each time you file a claim, you must pay a deductible. Customers should also note that the service call fee varies from company to company. The premium pricing is dependent on several other factors.

A home warranty provides a cushion for unknown issues that homeowners might face throughout the year. Before you buy, you should ensure that you read the home warranty contract.

THE BOTTOM LINE

Ensure that most of the appliances and systems that are actively used are covered. Home sellers that would like to provide a home warranty to buyers and homeowners. This will make them feel reassured that any repairs or replacement would be covered with a home warranty.