Companies that offer home warranties have contracts with authorized service providers. When a home warranty-covered item malfunctions, the homeowner phones the home warranty company, which dispatches one of its service specialists to investigate the issue. The service provider completes the job if they find that the warranty covers the required repair or replacement. Only a minor service fee is charged to the homeowner in addition to the warranty cost.
Homeowner insurance frequently excludes coverage for these items. Or, the expense of correcting them (although high) wouldn't be enough to satisfy the insurance policy deductible, the amount over which coverage begins.
Most policies feature a fundamental element that offers certain coverages to all homeowners who acquire a policy. Additionally, homeowners can pay extra money for one or more optional parts that offer more coverage.
Homeowner insurance, which protects against big risks like fires, hail, theft, vandalism, and specific water damage that may impact the entire building or the homeowner goods, is different from a home warranty.
A house warranty agreement between a homeowner and a home warranty provider offers significantly reduced repair and replacement services for main home systems, including the furnace, HVAC, plumbing, and electrical. A house warranty may cover major appliances like refrigerators, washers, and dryers.
A house warranty, like other warranties, is meant to give peace of mind and protection from expensive, unanticipated repair costs. A house warranty might serve as a safety net for a homeowner who doesn't have an emergency fund or wishes to set it aside for other purposes.
Home warranties make sense for those who aren't handy or don't want to bother about finding a professional when they have a problem. For those who like high-end appliances, warranties might make sense.
House warranties are frequently discussed when a home is being sold or bought. A home warranty can provide a buyer peace of mind if they are unsure how well the house components have been cared for or, in the case of new construction, how well the house has been constructed. A warranty might also be useful for those who have just spent all their funds on a property and want to prevent incurring any additional costs.
For house sellers, including a paid-up, one-year home warranty with the purchase may give some defense against buyer complaints about any issues or flaws found after the transaction is finalized. Offering a house warranty, however, does not free the seller from the obligation to disclose any known issues with the property.
