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HOME WARRANTIES
A home warranty will protect you from having to pay thousands of dollars on repairs and avoid turning your home into a money pit. When in the market for a warranty, it is very important that you know exactly what you are going to be covered for. It is equally important that the company insuring you is a reputable one.

Types of Home Warranty Coverage
There are two main types of home warranties: ones for existing homes that have previous owners and those for brand new construction homes.

 

Pre-owned home warranties
Typically cover normal wear and tear on the mechanical systems of the home. However, they do not cover pre-existing issues. Mechanical system coverage means the central cooling and heating systems, water heater, oven, range and hood, dishwasher, interior electrical and plumbing systems, garbage compactor and disposal, and the electric garage door opener. You will also have the choice of adding on options for covering pre-existing problems, as well as spa, pool and/or well pump coverage. The normal price range for pre-owned home warranties is between $250-500/year with the option for renewal every year.

Most new home buyers keep warranties for the only the first year of homeownership. It is also not uncommon for homeowners to renew their policy every year.

New home warranties
These types of warranties are issued by the developer at the closing. They typically last for ten years and offer coverage for structure, foundation and roof of the new home. Homeowners will also have the choice of adding on options that will cover materials, workmanship and the electrical system of the home.

Why Buy a Home Warranty?
A home warranty offers piece of mind. Suppose you just purchased a newly constructed home and the air-conditioning system stops working. Having a home warranty will protect you from having to pay for the bill to fix the system, which can be as high as several thousand dollars!

In many states an existing home warranty is included in the sale of homes.

 

Having a Warranty Is Not a Guarantee
It is not uncommon for a home warranty to have a cap on the amount that can be paid towards repairs. Therefore, you should always know what your contract says before committing payment towards it. 

Also, make sure your warranty company is a reputable one. If they go out of business, you will have no recourse. It always a good idea to check with the BBB to find out about a company and its history.

Prior to buying any home, it is important that you have the house inspected so you know what you are getting yourself into.

We also invite you to read the home purchase guide.



        

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