What to Look for When Reading a Home Warranty

Though they have actually been available for a number of years, home warranties have been gaining a new popularity because of their widespread recommendation by a number of realtors and mortgage agents. Depending on the home warranty that's offered, most if not all of the potential problems that can occur within the weeks and months that follow closing on a home can be insured. Unfortunately, some home buyers fail to understand exactly what is and isn't covered by the home warranty that they purchase… this can be because they simply aren't familiar with the concept of home warranties and don't understand exactly what they are, or it can be a result of not taking the time to fully read through and understand the warranty that they receive. In order to make sure that you get the most coverage possible out of your warranty, it's important that you know not only how home warranties work but also that you know what to look for when reading through the features and limitations that are presented to you. What a Home Warranty Is
Originally, home warranties were primarily used as an added selling point to encourage nervous buyers to go through with the purchase of a home; should they move in and have their major appliances turn out to be in much worse condition than they originally thought, they wouldn't face buyer's remorse because the warranty would cover the cost of fixing or replacing the faulty appliances. As these warranties are becoming much more popular, however, they have taken on a new life as a supplement that is either given by the realtor or mortgage agent (with a limited duration, of course) and also as a major shopping consideration for those buying a new home (especially if it's their first home purchase.) A home warranty is often compared to an extension of the homeowner's insurance that you already have… it's designed to provide a bit of extra financial security in case certain key appliances break down or vital systems such as electric or plumbing fail. Working just like a traditional warranty that would come with the products that you buy, your home warranty covers the cost of repair or replacement of these appliances or systems during the time that the warranty is active. It's important to keep in mind, though, that a home warranty isn't a replacement for proper homeowner's insurance and that just like any warranty there will be specific rules and regulations concerning the specifics of what is and isn't covered by your home warranty's terms. Some Things May Not Be Covered
Depending upon the terms that you agree to when purchasing your home warranty, some items might not be covered in the final warranty plan. This is why it's so important that you know exactly how the warranty that you purchase works and what is included in its scope of coverage. Common items that may not be covered in your home warranty plan may include those things which the warranty company considers "standard maintenance," such as cleaning the coils on an air conditioning unit, making sure that moving parts are properly lubricated, or damage that is caused by natural sources (such as a buildup of ice or damage from tree roots.) There may be other limitations as well, including the location of the appliance in question (some appliances, such as the refrigerator, may only be covered when in certain portions of the house) or the time period that the warranty has been in effect (since some warranty issuers will not cover some problems such as damage caused by rust within the first 30 days, or may only cover problems such as clogs in pipes and drains for the first year of your coverage.) Additionally, you may find that your warranty is only valid so long as you follow the exact procedure laid out in the terms of your contract. Key Items to Look For
When reading through a home warranty agreement that you're considering buying, there are several key things that you should look for to make sure that you're getting a good deal. Make sure that you note any limitations on the time period during which the warranty will cover damages (such as 30-day limitations or any coverage that drops out after a set period of time.) See if there are any major home systems that aren't covered, or specific circumstances that would cause a previously-covered system to not qualify. Look for any jumps in the renewal rate of your warranty, and make sure that you take note of any special procedures required to make a claim on the warranty (and whether failure to follow those procedures will cancel it.) Don't be afraid to shop around for a better deal if you don't like the terms that you're offered.