(Sept. 27 2019) A home warranty is different from a homeowner insurance policy.
Homeowners insurance policies cover things that “might” happen, such as theft, fire, storms/floods. But, home warranty plans cover things that “will” happen, such as AC isn’t cooling house down, toilet breaks, or dishwasher stops working.
Where homeowner insurance policies are mandatory for lenders, a home warranty is optional. In certain situations, a home warranty can be a good idea to give buyers peace of mind that they won’t have any big repair expenses.
A home warranty is a yearly service contract which covers the replacement or repair of household appliances and mechanical system components, such as HVAC, that unavoidably break down over time and use.
Home warranties cover the parts and components of major home systems and appliances, and technicians are sent to your home to repair them or replace them.
From HVAC systems to kitchen appliances, home warranty plans help cover damage caused by normal, everyday wear and tear.
To purchase a home warranty, you don’t need to have a home inspection, nor do you need to provide maintenance records before being able to purchase a warranty plan. And, companies don’t refuse coverage based on the age of your home’s systems and appliance.
When a technician is sent to your home for a repair, most companies charge a fee per visit. This fee can vary depending on what type of plan you purchase.
With many home warranty companies, you can choose your plan’s scope—as little as just covering appliances, or possibly covering only mechanical systems, or you can purchase combo plans that cover both appliances and systems.
Usually the systems plans will cover items such as hot water heaters, heating and air conditioning, garbage disposals, electrical, etc. Also, you don’t have to currently be purchasing a home to be able to purchase a home warranty plan.
While there are many home warranty companies available to choose from, a few of the largest home warranty companies with high customer service ratings from consumeraffairs.com are: American Home Shield, www.ahs.com; Choice Home Warranty, www.choicehomewarranty.com; and Liberty Home Guard, www.libertyhomeguard.com.
— Lauren Bunting is an Associate Broker with Bunting Realty, Inc. in Berlin.