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 (though I know you watch a lot of Property Brothers and Fixer Upper). You don’t know a socket wrench from a sheep ranch. Plus, you may also be a bit on the "broke" side after having purchased the biggest item of your life! A good solution to preparing for unexpected and necessary repairs is a Home Warranty. These are often offered as part of the buyer’s incentive package when you are buying a home.
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. You’ll want to read your warranty thoroughly and mark anything you don’t understand to have explained to you. But in general:
l If a home system or appliance breaks down or stops working, you call the home warranty company.
l Your home warranty company will call a service provider it has a business arrangement with.
l The service provider will call you to make an appointment.
l 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.
l You will pay a small trade service fee (usually less than $100).
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? Call your real estate agent. Your real estate agent should seek resolution for you.
What’s not covered? Check your specific policy, but in general:
l Outdoor items such as sprinklers l Faucets l Spas and pools, unless specific coverage requested l Permit fees l Haul aways
What can cause denial of a claim?
l Improper maintenance l Code violations l Unusual wear and tear l Improper installation
General coverage includes:
l Air conditioning l Dishwashers l Doorbells l Furnace/heating systems l Water heaters l Ductwork l Garbage disposals l Inside plumbing stoppages l Ceiling fans l Electrical systems l Range and oven l Telephone wiring
Your responsibility is to read thoroughly and understand your warranty before you agree to the terms. Be sure to clear up anything you don’t understand before you sign anything.
And as always, call your favorite Real Estate agent (hello!) if you want to learn more about Home Warranties, remember you can purchase one even if you already own a house!