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Home Warranty

Home Warranty

A home warranty is one of the insurance products that is rarely understood by homeowners.  While it is true that it provides repairs and replacement costs of appliances, coverage is not always provided. Contract terms dictate that warranty companies can deny repairs caused due to lack of maintenance.

Average household spending on home improvements and maintenance costs are in the range of tens of thousands of dollars every year and in some cases it exceeds the value of the home if you include upgrades. Equipments and appliances typically need repair and replacement services as they age. You can either spend money on repairs or can invest in an alternative form of insurance – called home warranty protection. You can buy home warranty insurance policies to cover repair and replacement costs. Home warranties are supposed to provide an insurance hedge against major home appliances such as HVAC (heating, ventilation and air conditioning) units, plumbing systems, refrigerators etc.

home warrantyMost of the companies will have the annual premium rate of 250 to 550 dollars and 60 to 100 dollars service call fee for every incident. Be aware that only certain set of appliances are covered by the policy. For example, most policies do not cover garage door openers, clothes washer and dryer, etc. Homeowner must get familiar with contract terms and coverage before buying.

Aged homes generally need home warranty protection as they tend to have appliance reaching the end of the life and replacement costs will be on the higher end. Most of new and existing homes are sold with home warranty policies as an incentive to the buyer. This is also one of the reasons warranty is overused as a sales utility rather than the actual insurance. For the same reason, home buyers are recommended to have a professional inspector inspect appliances before the closing date. It is NOT recommended to go with the home inspector suggested by real estate agent as it creates a conflict of interest.

Leading home warranty companies

2-10 Home Warranty

Home Warranty of America

Old Republic home warranty

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