Home Warranties - What are they?

As posted on http://www.crackerjackagent.com/blogs/1559/1367/put-your-mind-at-ease-with-a-hom

One of the scary things about making the leap from property renter to property owner is the idea of maintenance and upkeep. You’re no mechanic or repairman. You don’t know a socket wrench from a sheep ranch. And calling repairmen—how do you know you’re not going to get ripped off because of your lack of knowledge? One solution is the home warranty. These are often offered as part of the buyer’s incentive package when you are buying a home.  Or you can purchase one directly.

  

What a home warranty is not: It’s not a blanket insurance policy against anything ever going wrong in your home. It’s not a permanent warranty. It does have exclusions. Before you purchase or accept a warranty, it’s good to know what the warranty is, what it covers, what it doesn’t and how it works.

  

How does it work? Most home warranties are very similar, but not the same.  You’ll want to read each warranty thoroughly and mark anything you don’t understand to have explained to you. But in general:

• If a home system or appliance breaks down or stops working, you call the home warranty company.
• You will pay a small service call fee (usually less than $100).
• Your home warranty company will call a service provider it has a business arrangement with.
• The service provider will call you to make an appointment.
• The service provider will fix the problem. If an appliance or system is malfunctioning and can’t be repaired, depending on your contract coverage, your home warranty company will pay to replace and install the appliance.

 

What if the service provider doesn’t fix something to your satisfaction or says that the problem is your fault and isn’t covered by your warranty? If the issue arises during the sales transaction, call your real estate agent. Your real estate agent might be able to assist in seeking a resolution for you.

 

What’s not covered? Check each specific policy, but in general:

• Outdoor items such as sprinklers
• Faucets
• Spas and pools, unless specific coverage requested
• Permit fees
• Haul away

 

What can cause denial of a claim?

• Improper maintenance
• Code violations
• Unusual wear and tear
• Improper installation

 

Added Notes from Kristen:
General coverage:

 

Here is an example of Old Republics Warranty Coverage - note there are several levels of coverage.  Also note that coverage as a seller is different than coverage as a buyer.

To assist you in learning the differences among warranties and how they are administered, here are links to four different national warranty companies. 

Old Republic Home Protection
2-10 Home Buyers Warranty
Cross Country Home Services
First American Homebuyers Protection

Here is a site that compares and reviews various warranties and the companies - Home Warranty Reviews.

Bottom line, home warranties can be invaluable, but you have to do a little research to find which one suits you and your situation.