February 10th is National Home Warranty Day: Is Your Home Covered?
If you haven’t heard of a home warranty before, you aren’t alone. Unlike homeowners insurance, a home warranty covers repairs for appliances and systems in your home like your HVAC system, water heater, plumbing, stove/range and more. Homeowners insurance is focused on the overall structure and catastrophic issues like fire, hail and storm damage along with your personal belongings on the property and in the home. Unexpected repairs to major appliances in your home can be costly and don’t fall under homeowners insurance coverage. A home warranty can fill this gap!
What does a home warranty cover?
If you buy a newly built home, most builders include a one-year home warranty on appliances and home systems and a ten-year warranty on structural elements like the walls, doors, windows, plumbing and electrical. But it isn’t just builders who purchase home warranties! Many sellers will opt to purchase a one-year home warranty to entice buyers and as extra protection in case unexpected repairs crop up during the sales process. Most standard home warranties cover kitchen appliances (range/stove, built-in microwave, garbage disposal and typically the dishwasher also), plumbing, electrical, water heater, sump pump, HVAC or heat pump system and exhaust vents and fans. Many home warranty providers let you customize your coverage to also include washer and dryer, refrigerator, garage door openers, septic systems and swimming pools.
Know before you buy
Home warranty coverage can vary between providers so make sure you read the fine print and are clear about what is and is not covered by your home warranty, any limitations, and all fees and deductibles. Another key thing to know before you choose to buy a home warranty is that the warranty company will select the service providers should you need to use your benefits. Ask which preferred service providers the warranty company uses in your area before you buy. Most home warranties also require you to adhere to a regular maintenance service (which you pay for) and provide proof that an appliance or system has received reasonable and proper maintenance before they will pay to repair or replace it.
If you are selling a home, purchasing home warranty coverage can help you mitigate the costs of any unexpected repairs that happen during the sales process, while also providing an enticement for buyers. For homeowners and home buyers with tight budgets, a home warranty gives you peace of mind by covering the gap left between what homeowners insurance covers and what is the owner’s cost to bear.