Home Warranty Answers

What does a home warranty cover?

A home warranty service contract can cover repairs if you have an unexpected breakdown in electrical, plumbing or heating systems, or trouble with built-in appliances, such as ranges, washers, disposals, whirlpool baths, as well as other mechanical systems and built-in fixtures in your home.

Home warranty insurance coverage can vary by state and by contract. Be sure to do your homework and ask questions.

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I'm buying. Do I need a home warranty?

If you are buying, you have the added security of knowing that systems and fixtures will be covered when the sale is complete.

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I'm selling. Do I need a home warranty?

If you are selling, a home warranty plan can add to your selling points. Potential buyers will know that coverage is there if a system breaks down after the purchase. You are also protected if, during the closing, a problem covered by your plan occurs. Plus, if a repair is needed, after you sell your property, the new owner will call the insurance company directly (and not you).

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Is a residential warranty required?

A home warranty service contract is optional, but it benefits both buyers and sellers from surprise repair costs that are not covered by homeowner's insurance.

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How much does a home warranty cost?

There are many variables. The price of a typical home warranty for a single family home ranges from $175 to $400 - depending on the size and age of the property and the amount of coverage you choose. It is far less than the replacement cost of the systems and appliances it covers. There is usually a deductible of between $35 and $50.

Most basic plans, for example, will usually cover your water heater, refrigerator, washer, dryer, garbage disposal and micro-wave oven (if it is built in).

Higher-end policies can cover air conditioning, ductwork, garage door openers, pools, spas, sprinkler systems, well pumps and plumbing fixtures. Each plan is different, so be sure to shop around before you decide which coverage is best for you.

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Who pays for home warranty coverage?

Generally, the buyer pays the cost of a home warranty policy; however, the seller may buy a policy for the benefit of the buyer to avoid certain liabilities that may arise if problems occur after the closing.

Coverage begins as soon as you apply for it; premiums are paid at the time you close the transaction.

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What is home buyers protection?

A home buyers protection plan is a low-cost service contract that generally covers repairs for electrical, plumbing and heating systems and built-in appliances that are not covered by regular homeowner's insurance.

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Is a residential warranty required?

A home warranty service contract is optional, but it benefits both buyers and sellers from surprise repair costs that are not covered by homeowner's insurance.

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What's the difference between a home warranty and homeowner's insurance?

Home warranties cover appliances and household systems like plumbing, electrical, heating and cooling systems. Homeowner's or "hazard" insurance covers the structure of a home. Insurance also covers personal belongings and provides liability coverage in case someone is injured on the property.

Home warranties are optional in real estate transactions. Homeowner's insurance is almost always required, especially if the buyer has a mortgage.

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How many service calls can I request in a year?

Most warranty contracts do not limit the number of service requests you can make. However, they may limit the total amount paid on specific household items. Be sure to review your service agreement for these limits, especially if you have a recurring problem with the same appliance or system.

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If I sell, can I transfer my home warranty to the new buyer?

Sometimes. Most companies that offer this option will also allow the buyer to change or upgrade the warranty. A low-cost transfer fee may apply.

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