What is a Home Warranty?
A home warranty is a home service contract that covers the cost of maintaining systems or appliances for a specified period.
Home insurance vs. Home Warranty: What is the difference?
While home insurance is similar to a home warranty or residential service contract in terms of premiums, deductions, claims, and liabilities, they offer various services. Home warranties maintain the functionality of home systems that may break or wear out. On the other hand, home insurance covers damage or loss to the home itself due to fire or other natural disasters. When buying a home, the buyer may not know how well the previous owners have maintained and managed the house’s features.
How a Home Warranty Works
When your device or system is damaged, the homeowner contacts the home warranty. The warranty company usually works with one or more home service providers, such as plumbers or electricians. When submitting a claim, the company requests a warranty for the service from one of its partner service providers, who assesses the damage and then prepares a warranty report. The assessment report reveals the extent and possible causes of damage to the device. The home guarantee company checks whether the policyholder’s contract covers the appliance or installation for the damage determined. The warranty requires the contractor to repair or replace the system if approved.
What does a home warranty cover?
Most residential service contracts cover major appliances such as water heaters, stoves, and refrigerators. It can also include systems such as plumbing, plumbing, and electricity. It is essential to read the terms and conditions in a warranty document to understand the coverage and exclusion. While a home warranty plan cover garage door openers under the original coverage plan, others may require additional premiums.
While it is possible to purchase additional coverage for residential functionality that is not available with basic coverage, it is also likely that some companies will not provide warranties for specific residential components. For example, some companies offer an outdoor pool or SPA property guarantee as an additional premium on the contract. In contrast, other companies may not guarantee to bundle their offers.
Home Warranty Qualifications
Home warranty providers may decline coverage for various reasons. Known damage that existed before the start of warranty coverage may constitute a claim denial. For this reason, if a pre-purchase home inspection reveals damage to specific systems or appliances, the potential buyer should ask the seller to repair or replace the item before closing the sale. A warranty company also does not cover poorly maintained, poorly installed, or misused household parts. Homebuilders, sellers, and homeowners can purchase a home warranty. The price of a home builder’s warranty policy is usually part of the price of the new home.
Home warranty costs
The average cost of a substantial home warranty ranges from $350 to $600 per year. Additional coverage can cost between $100 and $500 depending on the products added. The policy’s price depends on the residence situation of the holder and the type of guarantee product purchased.
The compensation can range from $50 to $100. Most insurance policies include a clause that the owner will pay the minimum amount if the cost of repair or replacement is less than the compensation. New service fees will be charged on all features or systems scheduled for maintenance. For example, if a homeowner’s oven and refrigerator fail, he pays two separate business costs to the contractor.