Home Warranty Insurance

Discover the Importance

Home warranty insurance is an important asset to purchasing your new home. After purchasing your home you may not have as much in your savings account or reserve for repairs within that first year of owning your new home.

First time home buyers should especially consider requesting or purchasing a home warranty. Since this is your first home you may not know what all to expect in terms of maintenance.

WHO PAYS FOR THE HOME WARRANTY INSURANCE?

Usually the seller will pay for your home warranty. This is usually written in your real estate contract/offer to the seller. Sellers usually expect to purchase a home warranty for the buyer. In return, if the seller is purchasing another home s/he will also ask the seller of their new home to provide them with a warranty on their new purchase as well. So, the favor is then returned back to them.

Your Realtor should know to ask for a home warranty when you sit down to write up your offer, but in case they don't...make sure you ask for one! This will save you time and money because it will be paid for by the seller and presented to you at closing.

After closing, the seller is no longer responsible for repairs to your new home. You will deal "directly" with the home warranty provider to handle your claims and repairs.

HOW MUCH DOES A HOME WARRANTY COST?

Home warranty insurance is very affordable. Typically, a warranty will cost $250 up to $450.00 depending on the coverage of the warranty.

HOW LONG DOES THE COVERAGE LAST ON A HOME WARRANTY?

The coverage includes 12 full months (1 year warranty). After that first year the coverage will expire. Please note that you may continue your home warranty coverage by purchasing or renewing your next policy. You can always keep your home insured with a home warranty.

HOW DO THEY WORK?

• If a home system or appliance breaks or stops working, the home owner calls the home warranty company.

• The home warranty company calls a provider with which it has a business arrangement.

• The specific provider calls the home owner to make an appointment.

• The provider fixes the problem. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance.

• The home owner pays a small deductible (less than $100).

WHAT DOES THE HOME WARRANTY INSURANCE COVER?

Because all plans differ, you will want to ask specifically what is covered. Ask your real estate agent if upgrades are available. Pay close attention to whether the home warranty company will pay for repairs to make certain types of systems or appliances compliant with new regulations.

These items are typically covered:

• most major appliances

• plumbing

• electrical

• heating and air conditioning systems

The home warranty insurance covers unexpected mechanical failures due to wear and tear and is subject to a per-claim deductible.

WHAT CAN CAUSE YOUR INSURANCE CLAIM TO BE DENIED?

• Unusual wear and tear

• Improper maintenance

• Code violations

• Improper installation

Request that your seller purchase your home warranty. Then make the commitment to renew your home warranty insurance each year.

Think about this...you're into year 3 of your homeownership. It's in the middle of summer and your air conditioning unit goes out! You learn that the unit needs replacing and the cost is $2,500. If you have a warranty on your home your cost will be less than $100. Paying up to $450 per year for your warranty is a lot better than paying $2,500! Plus, you may need to use your warranty more than one, twice or three times per year.

Home warranties are investments that pay for themselves.

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