When buying a home you will be presented with hundreds of choices to make. You will be faced with questions like where to live, how much to spend, where to get a mortgage, should I use a real estate agent, how much money to put down, what type of loan to get etc. One choice that might get overlooked is whether or not to get a Home Warranty Service.
Just because your home inspection found no problems does not mean that you are free from costly home repairs in the future. Imagine signing your mortgage documents one month and a month later your air conditioning compressor fails. With a home warranty plan, which cost you around $450, the cost to replace the compressor is covered, but without the plan you are looking at paying $2,000. So while you are looking to get into a home with the least amount of money out of your pocket as possible, this is one expense you might not want to go without.
What Does A Home Warranty Cover On A Home?
Most home warranty plans are different from state to state and from company to company. Many home warranty companies have variations to the items covered in the basic plans. With most companies, you have the option of adding additional protection to basic plans.
Most plans offer to replace or repair coverage for a home’s heating and air conditioning systems, plumbing and electrical systems. Other items typically covered are dishwashers, hot water heater, ductwork, doorbells, ceiling fans, stove, telephone wiring, and garbage disposals. Some companies even offer to cover your major appliances like refrigerators, washers and dryers, and pool pumps and motors to give a few examples.
It is a good idea to ask for a sample policy to review your options before you decide on your policy. Make sure you speak to your real estate agent about wanting to review a sample home warranty policy ahead of time.
Is My Roof Covered Under A Home Warranty?
Most home warranty plans do not cover structural issues. Foundation and roof problems typically wont be covered by your home warranty. You would be smart to have at a minimum a home inspector go through and inspect the property thoroughly during the inspection period of your purchase contract. He may suggest additional inspections depending on what they see on the initial inspection. You may also want to look at having an engineer provide additional assurances to the integrity of the construction and quality of the property.
What Won’t A Home Warranty Cover?
A home warranty will never cover pre existing conditions. If the hot water heater has not worked for a long period of time it probably won’t be covered. If it was not working for the old owner, it probably won’t be covered for you. If the issue in question is not up to code or there is no building permit, you may be out of luck.
Some policies will only cover you up to a certain dollar amount. If you have an expensive Grohe faucet that goes out, the home warranty company will probably not replace it, only give you a credit. You will have to make up the difference if you want the same fixture to go back in.
Other items that a home warranty will not typically cover are automated yard watering system, spas, faucet leaks and repairs, local construction permit fees, expenses to haul your broken appliance away, improperly maintained items, and expenses to overcome code violations.
Is There A Service Fee For A Home Warranty?
Depending on the warranty company you will probably have to pay a service call fee if you are having an issue. You may want to call first to see if the issue in question is even covered. You will pay for someone to come out and tell you the item is not covered so make sure the item is even coverable. Most companies have a service call fee ranging around $45 (plus or minus) depending on the plan.
If you are not sure about home warranty companies, talk to your real estate agent. Most of them are familiar with how the plans work. They can also provide you a list of home warranty companies to investigate. You can also use the search tool on GetPreQualified to locate a company by doing a search for home warranty in your zipcode.
If you want peace of mind in your new home, I recommend getting coverage for at least the first year of home ownership. It can be more expensive to cover the home beyond that. You will reach a point around a year where the normal wear and tear of the majority of your home’s appliances and major components will be worth less if you have to replace them than the coverage premium. This is a stopping point for the home warranty plan to be a smart investment.
