If there’s one thing you can count on aside from death and taxes, it’s your major appliances plus your heating and electrical systems breaking down sooner than later. That’s where a home warranty comes in handy both for your peace of mind and your pocketbook.
For instance, what if the water heater breaks down in the middle of a cold, nasty winter? Says the professionals at Cinch Home Services, a viable water heater warranties company, your water heater isn’t something you’ll be thinking a whole lot about until you turn on the shower hoping for a some hot steamy water but instead, get nothing but an ice cold flow.
The sad fact is that a broken water heater can ruin your day, not to mention your family’s day. Plus, once the heater is broken, it’s far too late to do anything about it. But if you have a home warranty contract that covers the water heater, you can at least place an immediate call to them.
In a relatively short period of time, a reputable mechanic will arrive at your home and determine if the heater can be fixed or if it needs replacement. What’s even better, is your our-of-pocket expenses will be minimal.
But you might be wondering what else a home warranty covers and also what it might not cover. The answer to both is not so black and white, but it does largely have a great deal to do with the age of your home, your budget, and your needs and wants as a homeowner.
According to a recent report by Money, having a good idea of what a home warranty covers will assist you in choosing the best plan possible for the repairs your home needs now and in the near future.
So then, what precisely can you expect a home warranty to cover? It all depends on the specific policy you buy. However, you can expect most major appliances like washing machines and refrigerators to be covered automatically. You can also count on major electrical, heating, and plumbing systems to be covered.
But you should be aware that most home warranty companies have a long list of limitations, exclusions, and terms. This is why it’s so important for you to carefully read your service contract to gain a better understanding of what’s covered and what’s not covered, plus the specific reasons why your home warranty can potentially be denied.
What follows will give you a better understanding of what a home warranty covers and what it doesn’t.
What a Home Warranty Covers
Says Money, the terms of a home warranty coverage policy can be very specific. If you haven’t educated yourself on the policy and do not know what to expect, you stand the chance of being disappointed if you believe you’re not getting your money’s worth when something goes wrong.
Here’s a more detailed look at what you need to know about home warranty coverage.
Defining Home Warranty Coverage
The best way to do this is to gain an understanding of what a home warranty is not. It is not, for instance, homeowner’s insurance which can cover property damage caused by vandalism, fires, and storms. It’s said that even the most comprehensive homeowner’s insurance won’t cover the repair or replacement of systems and appliances that break down from everyday wear and tear. That’s where the home warranty enters the picture.
Also known in the industry as a service contract, a home warranty is contractual agreement between a homeowner who purchases the plan and the home warranty business. A typical contract will include a monthly or annual fee for the protection of home appliances and systems such as electrical wiring, HVAC, plumbing, plus machines like water heaters, washers/dryers, refrigerators, stovetops, and more.
If a breakdown occurs with any of these covered items, the home warranty company will put up the money to pay for a repair or replacement, minus a nominal service call fee (usually $50 to $80).
What will your home warranty cover? The answer depends on your specific policy, but typically it will include:
-Cooling and electrical systems such as ductwork and HVAC
-Electrical and plumbing systems
-Most major kitchen appliances like ranges and cooktops, dishwashers, refrigerators, along with built-in microwaves
-Laundry room appliances such as driers and washing machines
-Garbage and trash disposals
-Ceiling fans, central vacuums, garage door openers, and doorbells
What a Home Warranty Does Not Cover
Money states that home warranties come with coverage limitations, which is why you must take the time to review your contract’s fine print. Most policies will likely exclude coverage for pre-existing damage to appliances and repairs because of the wear and tear that occurred prior to your purchasing the home.
The contract also won’t include coverage for pre-existing damage to window air-conditioning units or, in lots of cases, appliances the homeowner purchased and installed after buying the homeowner’s warranty policy.
Also, you can expect most home warranty companies to place limits or caps on how much money they will payout for repairs or replacements. Depending on the policy there will also be deductibles and service fees.
For example, if your HVAC system fails, your contract might contain a cap of $1,500 on HVAC repairs for the entire year. There are likely to be similar caps in your home warranty contract. For instance, don’t expect to have two refrigerator replacements in a single year, unless you have specifically requested that type of coverage prior to signing your contract.
Other items that will likely not be covered in your policy:
-Small appliances like a countertop oven or a toaster
-Duplicate appliances like a second freezer or the appliances that facilitate a second kitchen
-Systems that no longer have maintenance records such as your aging HVAC system
-Kitchen components like shelves, knobs, and drawers
-Failures and breakdowns that occur due to lack of proper maintenance
-Failures due to bad installations, modifications, or repairs
-Existing structural damage to basement foundations, corrosion, rust, and sediment buildup
-Previously damaged, doors, windows, and floors
-Existing roof leaks, moldy shingles, and wood underlayment rot
You also need to know that a home warranty might not cover the repairs that service contractors interpret as ineligible. There will be reasons for repair ineligibility such as lack of proper maintenance, but the decision will ultimately be based on the service contractor’s assessment along with the home warranty company’s judgment.
If you’ve purchased a home that’s older and comes with appliances and systems that are past their prime, you absolutely need to look into a home warranty policy. Otherwise, you will be paying out-of-pocket for frequent breakdowns.
However, if you’ve purchased a new home that comes with new appliances and systems, it still pays to purchase a home warranty, but it doesn’t need to be as comprehensive.
