Home Warranty Plans

Home Warranty Plans have only become popular fairly recently. And at the relatively low cost of $250.00 – $400.00 per year, they are being used both as a perk offered by sellers and as a safety net for first-time buyers. In fact, most of the time sellers will agree to pay for a plan at the closing. Here’s how they work.

Very simply, a home warranty is a service contract that covers the repair or replacement of many residential systems and appliances that break down. When something covered by the warranty needs repair, you call the company that provides the insurance. The company responds 24/7, and contacts a local and insured contractor to service the problem.

Companies typically charge homeowners a small service fee or deductible which is usually between $50 and $100 per claim and it goes directly to the contractor. This helps to minimize frivolous calls. All other labor and parts are covered by the warranty.

A home warranty is prepaid for a period of one year, at which time it either expires or is renewed. Because of this, a home warranty can be used an unlimited number of times during the warranty term without the rates going up.

The downside is that most companies will not allow you to claim multiple problems at the same time. For instance, an electrical short in the house could damage several different appliances simultaneously. In this case, many companies would charge you a service fee to fix the electrical system, and then a separate service fee to repair each of the appliances.

Also, bear in mind is that warranty companies prefer to fix things rather than replace them. This means that you might have to live with certain inefficiencies unless you are willing to pay for an upgraded appliance or system.

Home warranties usually cover appliances, heating & cooling systems, internal wiring including telephone and data lines, electrical systems, ductwork ceiling fans, doorbells, water heaters and garbage disposals. If the contractor determines that a device can not be repaired, it will most likely be replaced.

As with any type of insurance, not all repairs are covered. For instance, outdoor equipment like sprinklers usually aren’t included, nor are spas or pools, unless specifically stated. Home warranties won’t cover building permit fees, or the hauling of trash. Many plans will not cover faucets, and some won’t pay for basic appliances, so read the fine print for any home warranty you are considering.

Home warranties are intended for problems that happen after the purchase of a home. Therefore, everything covered by the policy must be in good working condition prior to the sale and transfer of ownership. These warranties can not be used to repair systems or appliances that are already faulty.

Lastly home warranties cover systems and units that break during normal use. They do not cover system or appliance failures due to lack of maintenance. They also don’t cover items that were improperly installed or don’t meet building codes for your area.

In addition to a Home Warranty, consider getting a separate gas line warranty, if you have gas in the house. This warranty will be separate from your home plan. The gas company is only responsible for delivering the gas as far as the meter. A gas line warranty covers repairs to the line from the meter to inside the home. Separate water line warranties are also available.

The bottom line is that if you have just one major furnace repair, a home warranty will have paid for itself, and possibly even several times over. So is a home warranty right for you? Call Susanne today at 614-975-9659 to discuss your specific situation.