Does home warranty cover all your appliances?
Home warranty is an insurance that covers repair and replacements costs of home appliances. Home warranties are different from home owners insurance, which is more of a hazard insurance and provides coverage in case of a natural disaster. Home warranty provides covers wear and tear expenses, however unlike other insurances you do not get blanket coverage. The major home warranty providers include First American Home Warranty, Old Republic and AHS.
Premium and the deductible per incident (called service fee) vary and you should review the rates and go with the one that fits your budget. As a rule of thumb, do not go with the cheapest option. Choose the next to cheapest or better yet the median price. Ultimately you get what you pay for, so you have to be careful with cheapest offers.
Older homes, in general, require home warranty policies as they tend to have older appliance reaching the end of the life cycle and replacement costs are higher. Most of new and existing home sales come with home warranty as the new buyer will not want to repair the new house right after the sales. For this reason home warranty is used as a sales vehicle while selling the house. However, the home buyer should have a professional inspector check each and every appliance in the house. It is NOT recommended to use the home inspector recommended by your real estate agent for obvious conflict of interest reasons.
Most of the home warranties will have the annual premium rate of 250 to 550 dollars and 60 to 100 dollars service call fee for every incident. Be aware that only certain set of appliances are covered by the policy. For example, most policies do not cover garage door openers, clothes washer and dryer, etc. Homeowner must get familiar with contract terms and coverage before buying.
Home warranty coverage varies depending on the insurance provider. You should check if you need additional coverage as the basic coverage may not include all the appliances you wanted to cover. It is very important to review the contract before sign it. Do not make payments until you see the contract paperwork. There are some fraudulent companies that make you pay first and then send the contract which would include many restrictions that are not explained up front.
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