Many purchases that you make come with the option to buy a warranty in the event that the product is damaged, such as small appliances and electronics. This helps cover the cost of repair should they break down so you’re not paying out of pocket.
Warranties also apply to home purchases and offer buyers some peace of mind knowing that the major components and systems of the property are covered in case something goes wrong after you take possession. While they’re certainly not mandatory to buy, home warranties can help alleviate any concerns that you might have about anything malfunctioning in the home, and will be of financial assistance should anything go awry.
That said, it’s important to understand exactly what is covered under home warranties before you buy into one, as not necessarily everything under your roof will be covered.
The specific coverage offered will depend on the plan that you choose and the items you want to be covered, as all home warranty plans differ. The warranty company that holds your policy will replace or make any necessary repairs on any covered item that breaks down as a result of normal wear and tear according to the plan’s terms.
It’s critical for homeowners to fully understand precisely what is included in the home warranty in order to avoid the disappointment of a rejected claim.
That said, certain items are typically included in basic coverage, including the following:
• Electrical system components
• Plumbing systems
• Ovens and stovetops
• Built-in microwaves
• Water heaters
• Exhaust fans
• Sump pumps
Of course, homeowners may opt to upgrade their coverage in order to have more items included in their home warranties, such as:
• Air conditioner units
• Washers and dryers
• Central vacuums
• Hot tubs
• Garage door openers
• Septic systems
Have Your Home and its Components Inspected Before Taking Out a Policy
If there’s something wrong with any one of the components in your home that you want covered, it’s possible that the warranty company you’re with will refuse to approve your claim. They’re covered under what’s known as a “pre-existing condition” clause that basically states that the company will not cover any component that already had an underlying condition.
In order to avoid the frustration of having your claim denied, it’s advisable to have your home and its components inspected first if your warranty does not cover pre-existing conditions.
What Constitutes a Denied Claim?
A pre-existing condition isn’t the only thing that could result in a rejected claim. Other issues that could leave you empty-handed include inadequate maintenance, improper installation, excessive and unnecessary wear and tear, and violations of building codes. Make sure none of these apply to you before you attempt to file a claim for a malfunctioning component.
Isn’t a Home Warranty the Same as Homeowner’s Insurance?
After reading about what home warranties are, you might be wondering how they differ from homeowner’s insurance plans. Granted, they do sound somewhat similar, but they’re certainly not the same thing.
Home warranties are designed to protect the systems and appliances of homes from any malfunctioning that is caused by normal wear and tear. On the other hand, homeowner’s insurance covers damages and loss as a result of issues out of your control, such as fires, natural disasters, or theft. They don’t cover anything that simply breaks down after normal use. That’s where a home warranty enters the picture.
The Bottom Line
It’s always important to look over your home warranty policy in great detail to understand exactly what items in your home will be covered. If you want more coverage for additional items that are not part of your basic policy, you’ll need to pay extra for these to be included. Even if you currently have a home warranty that you’ve been paying for every year, you should still look it over in the event that your coverage changes.