By Patrick McCarran
Real Estate Broker
Whether you are putting your plans on hold to sell or an investor entering the market you may be concerned about basic maintenance on a Home. A warranty may be able to help. There are quite of few basic coverage options for everyday issues such as being overrun by ants or a clogged toilet, for just a $75 service call you can have this taken care of saving as much as $200. It is largely for reasons such as these that I highly recommend them and the peace of mind that they can bring. Considering that the average water heater runs about $1300, and a new furnace and A/C can run over $10,000 with the new SEER laws, a home warranty can save you thousands of dollars on a repair that pops up after you purchase a home.
I think it is important to understand that a home warranty is not an end all be all warranty and you should be aware of exactly what the home warranty covers. It does not cover everything that may go wrong but does cover a great many items. The warranty brochure will spell out exactly what is covered and what is NOT covered. It has been my experience that the major warranty providers do not try to “wiggle out” of paying, if it is covered and not obviously a pre-existing condition then they will repair or replace. In general the warranty will cover items not covered by your homeowners insurance. For example if a pipe leaks the homeowners policy will cover the damage caused by the leak but not repair the pipe, the home warranty will cover the pipe but not the damage.
Be aware that if the warranty is generally only for basic coverage, you will need extended coverage, such as for pool equipment, air conditioning, or even the refrigerator, you may be able to negotiate that extra cost with the seller, or consider paying the difference yourself. It is important to note that you must file a claim with the warranty company and use their service provider, if you have a problem you can request a new vendor but you cannot generally call your own contractor and expect the warranty to pay them. Remember that although most home warranties provide coverage only for one year, but you can always extend for more time upfront or most plans are renewable after the first year. One of my clients kept their home warranty for the 22 years they owned the home.
Take note of what the deductible or per visit cost for repairs?. What is the maximum dollar amount for repairs and what are the policy limitations such as new fittings or SEER inspections or permits? Also the warranty company can buy out the claim, sometimes this may work out better for the homeowner.
Home warranties definitely have a place when it comes to protection and peace of mind. For sellers or landlords they can act as “insurance” that you won’t get an angry call about the bad water heater in the house and for buyers you don’t have to worry about dealing with the added expense of replacing a major system or appliance after you move in.
Have any questions on home warranties and providers? Give me a call and know your options.