One of the scary things about making the leap from property renter to property owner is the idea of maintenance and upkeep. You are no mechanic or repairman. You do not know a socket wrench from a sheep ranch. And calling repairmen—how do you know you are not going to get ripped off because of your lack of knowledge? One solution is the home warranty. These are often offered as part of the buyer’s incentive package when you are buying a home.
What a home warranty is not: It is not a blanket insurance policy against anything ever going wrong in your home. It is not a permanent warranty. It does have exclusions. Before you purchase or accept a warranty, it is good to know what the warranty is, what it covers, what it does not cover and how it works.
How does it work? Most home warranties are very similar. You will want to read your warranty thoroughly and mark anything you do not understand to have explained to you. But in general:
If a home system or appliance breaks down or stops working, you call the home warranty company.
Your home warranty company will call a service provider it has a business arrangement with.
The service provider will call you to make an appointment.
The service provider will fix the problem. If an appliance or system is malfunctioning and cannot be repaired, depending on your contract coverage, your home warranty company will pay to replace and install the appliance.
You will pay a small trade service fee (usually less than $100).
What If the service provider does not fix something to your satisfaction or says that the problem is your fault and is not covered by your warranty? Call your real estate agent. Your real estate agent should seek resolution for you.
What is not covered? Check your specific policy, but in general:
Outdoor items such as sprinklers
Refrigerators, washers, dryers and garage door openers
Spas and pools, unless specific coverage requested
What can cause denial of a claim?
Unusual wear and tear
General coverage includes
Inside plumbing stoppages
Range and oven
Your responsibility is to read thoroughly and understand your warranty before you agree to the terms. Be sure to clear up anything you don’t understand before you sign anything.