Serving Baton Rouge & Surrounding Areas
Stacy Branyan, Realtor
A home warranty is a subject that concerns many home buyers. They can cover a multitude of items and systems, so it can be a good idea to get a home protection plan. Here are some answers to frequently asked questions about home warranties.
Who Pays for the Home Warranty?
It varies. Generally, the buyer pays the cost of a home warranty policy; however, the seller may buy a policy for the benefit of the buyer. 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. If you are buying, you have the added security of knowing that systems and fixtures will be covered when the sale is complete. Premiums are paid at the time you close the transaction.
How Much does a Home Warranty Cost?
They are fairly inexpensive, typically ranging from $425 to $650, depending on the size and age of the property and the amount of coverage you choose. It is may be less than the replacement cost of the systems and appliances it covers. There is usually a deductible of between $35 and $75. Home warranty companies sometimes run special sales and either discount policy prices or offer additional coverage for the same price. The policies are prepaid for a year in advance, at which time they expire or can be renewed.
How Do They Work?
Although specific plans provide for specific types of coverage, most operate the same way.
- If a home system or appliance breaks or stops working, the home owner calls the home warranty company.
- The home warranty company calls a provider with which it has a business arrangement.
- The specific provider calls the home owner to make an appointment.
- The provider fixes the problem. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance.
- The home owner pays a small deductible.
What Can Cause Denial of Payment?
- Improper maintenance
- Code violations
- Unusual wear and tear
- Improper installation
- Lack of home inspection
Most basic plans, for example, will usually cover your water heater, refrigerator, washer, dryer, garbage disposal and microwave 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 and read a sample policy before purchasing.
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.
If you have further questions, contact me at 225-229-0451 or email@example.com.