Home Owner Warranty

Home Owner Warranty Basics

A home owner warranty is similar to a service contract that can be purchased with a new or used vehicle. The warranty helps protect your investment by covering failures that can occur in the major systems and appliances within your home.

Though a home owner warranty may sound a lot like homeowner’s insurance, there is a big difference. Homeowner’s insurance is essentially hazard insurance. It covers items that are damaged in fires, by water, by wind, or other natural and unnatural events that are covered under the insurance policy. A home owner warranty, on the other hand, repairs and replaces major systems and appliances that have broken down as a result of normal wear and tear.

Many home sellers have begun to purchase home owner warranties for their homes because it makes the property more attractive to potential buyers and gives the seller a competitive edge in the market. Buyers feel more comfortable knowing that the home will be protected for a specific amount of time and are much more likely to buy a property that is covered by a home warranty.

Home Owner Warranty Coverage

In many cases, it doesn’t matter how old your home is, nor does it matter how old the appliances within it are. Almost any home is eligible for a home owner warranty. In fact, a home inspection may not even be necessary prior to receiving warranty coverage.

Though a home warranty provides coverage in the event of a breakdown or total failure, there may be out of pocket expenses that apply. For example, some home owner warranties require you to pay a deductible or a service fee each time a technician is sent to your home. However, should you have major problems with your home, these charges may save you money in the long run.

What a home owner warranty covers and what it doesn’t cover will depend on the warranty terms that have been set within the warranty contract. Most home warranty contracts cover systems and appliances, such as:

• Ceiling fans
• Central air conditioning
• Central heating systems
• Central vacuums
• Clothes washers and dryers
• Dishwashers
• Ductwork
• Electrical systems
• Garage door openers
• Garbage disposals
• Microwave ovens
• Plumbing pipes and systems
• Refrigerators and freezers
• Roofs
• Septic tanks
• Spas and jetted tubs
• Stoves and ranges
• Sump pumps
• Swimming pools
• Trash compactors
• Water heaters
• Water softeners

Keep in mind that every home warranty provides different coverage. The items shown above are just an example of what may be covered. Some warranties cover more and some cover less. If you are thinking about getting a home owner warranty or if you are purchasing a house that includes a homeowner warranty, you will want to get specific details in regards to the coverage and any deductibles or service fees that you will be required to pay.

Purchasing a Home Warranty

To purchase a home owner warranty, you must first determine how long you want the warranty coverage to last. Most warranty contracts last one year, but are guaranteed renewable. Other warranties may last longer, and in some cases, you may be able to purchase lifetime warranty coverage.

Before making any decisions, you should take time to shop around. There are now many different companies and services offering home owner warranties. By taking time to evaluate all of your different options, you can ensure that you buy coverage that truly protects your investment.