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Home Warranties

May 27, 2008  |  Difficulty: Easy

Cosy home
Whether you are building your new home from the ground up, or purchasing your home from the previous owner, you might want to have more information about the warranty for your home.

Home warranties give you protection for a designated amount of time (one or two years). During this time you are protected against problems that can occur such as unexpected repairs that are not typically addressed within your homeowner’s insurance. Warranties are very much beneficial. They cover you financially during the first year or so after purchasing your home. This is a time when you have little to no money to cover unexpected expenses, so your warranty can be a comforting financial cushion.

When you buy your warranty, you are purchasing extra financial coverage that will protect you in situations where your home insurance will not.

The warranty is made to protect more than just the home. Here is a list of what a home warranty can cover:
  • Financial security for repairs or needed installations that are caused by standard wear and tear. It covers systems, appliances and the property itself.
  • Covers the present systems and appliances installed, no matter the model, make or age.
  • Service contractors that are available to you in your area. These contractors -provided to you through the warranty company- will be available 24 hours a day every day of the year.
  • Emergency coverage that will allow you access to a service contactor within 2 hours of calling. The contractor will be available even during holidays and weekends. This will help avoid claims against your normal home insurance.
  • Replacement of systems or appliances that cannot be fixed. The replacement item will have similar features and will execute the same tasks. 
  • There will be a great customer service policy that states that each repair will be done in a satisfactory manner. You can get a policy that states that you will receive coverage until the job is completed to your liking.
  • Coverage options will be available. You can choose from “basic” coverage, to a more extensive plan that will typically be at a higher price.
  • Reasonable payment options that can be an up-front cost, a yearly cost or a monthly cost.

Keep in mind that there are “service fees” that come along with a warranty policy. This means that a repair isn’t completely “free” if it is covered by your warranty. You will be charged a fee every time you request an item to be fixed. Service fees are usually put in place to avoid petty claims. But this service fee is nothing compared to what you will pay a company to repair the broken item. A service fee is usually around $50-$80. So under your warranty you will have to pay about $50 for the contractor to come to your home, and another $50 dollars for the contractor to repair the broken item. Where as a independent company will charge $50 just to come to your home, and a ghastly amount for the parts and labors to fix the item. Overall, you are saving money.

Both buyer and seller can buy a home warranty. Sellers can buy a home warranty that will be given to the buyer, so as to make the house more desirable on the market. A buyer can buy the warranty to cover any mishaps that might happen during the first year or so of homeownership. It will give the assurance that if anything goes wrong during the time that you are covered, you will have the means to get things taken care of, without the stress of having a large financial burden. 

Policies for homes that are pre-owned are limited to about a year. Homes that are newly built can be covered by a policy that lasts for several years. If you are buying a home directly from a builder you can get a warranty that can last up to 10 years! This will definitely help, especially if you find out that the builder has made an error.

Even if a builder has an impeccable reputation, it is wise to get a warranty. Going through a lawsuit to cover the damages is costly within itself, and even then you are not guaranteed to get all of your money. A warranty can alleviate this, and ensure that all your unexpected needs are covered. In a lot of cases, a builder will sell you a warranty along with the home. Make sure you have a warranty that will cover you in your time of need.

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