Home Warranties

Home warranties are intended to be insurance policies to protect against home system breakdowns. Prior to purchasing a home warranty, obtain a copy of the warranty to review and ask questions about coverage. Consider the following:

  • Just like every insurance policy, warranties have exclusions. Determine what exclusions apply. For example, bathroom plumbing may be warrantied but the steam room or jacuzzi may be excluded.
  • Give the warrantor a specific example of an expensive repair, e.g., roof leak, and ask what is and what is not covered under the warranty.
  • Ask about deductibles (can range from $75-$150) and to what they apply, e.g., labor, parts, service calls?
  • What labor, material costs and types of components are covered?  For example, for a repair, does the warranty require Original Equipment Manufacturer (OEM) parts or does the warranty allow non-OEM, aka remanufactured parts or components.
  • Ask the warranty company who their current local vendors are and how many they have in the area. This will give you an idea of how many are available for a community of a given size and how long you may have to wait to have a diagnosis and repair.  A bit of online research about the vendor or home warranty company could help you avoid a predicament where the warrantor or vendor isn’t cooperating as promised under the warranty.

Generally, home warranties on average cost about $500/year. Shop around and ask a general contractor or property manager for a few recommendations.

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