When buying a home, you do not have to purchase a home warranty but it is an optional home coverage. A home warranty can save you a lot of headaches in the long run, especially in a home with older appliances and home systems. It is a contractual agreement where the cost of repairing or replacing home systems and appliances is covered.
Home warranty coverage will give a certain amount per appliance or system. If the cost of the repair goes over this amount, you can pay for the difference or you can have it replaced. Home systems that are typically covered are internal plumbing, internal electrical systems, heating and cooling systems, smoke detectors, fire detectors, burglar alarms, central vacuum cleaners, ceiling fans and attic fans. Included appliances are usually refrigerators, ice makers, built-in ovens, microwave ovens, ranges, cooktops, washers, dryers, dishwashers, exhaust fans, exhaust hoods and garbage disposals.
You will need to be familiar with what is not covered. The main items that are usually not covered by a home warranty are issues that have already been discovered by a home inspector, a problem that occurs because of neglect or poor maintenance, systems or appliances that are damaged due to neglect, incorrect use, incorrect installation or manufacturing flaws, damage caused by pests, removing led or asbestos, solar panels, fireplaces, commercial appliance or cosmetic damage. It is very important to review what is not covered in your home warranty. Read the small print very carefully. A doorbell might be covered, but not a doorbell that is part of an intercom system.
Another thing that is not covered is the actual structure of your dwelling. This would include windows, foundations, flooring walls and roof. If you are purchasing a new construction home, it might come with a home warranty for new construction. Builders can provide you with a new construction home warranty for up to ten years. The warranty is usually included in the home price. It will cover labor and materials used to build the home, and potential problems with the roof, exterior walls, foundations and frames.
Do not let a home warranty confuse you with a manufacturer's warranty. Home appliances and home systems come with a manufacturer's warranty automatically. A manufacturer's warranty covers the cost of parts and labor needed to repair but only if the damage is caused by a manufacturing fault. This kind of warranty is also limited to new systems and appliances.
So what about home insurance? Having both is a good idea because a home warranty protects your home's systems and appliances while home owner's insurance is more comprehensive coverage. It includes the dwelling, personal belongings and liability protection. Talk to a professional to see what is best for you and your situation.
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