What Does A Homeowner Warranty Cover?

Many house purchasers ponder whether or not to add on a homeowner warranty policy. There are pros and cons to buying this sort of insurance. Some points to consider are the age of the house, whether the buyer or seller pays for the warranty, the reputation of the company, and exactly what the policy covers. There are many variables so not just one correct answer. It will depend on the individual circumstances. Here are some things to think about:

- Age of the house: If a structure is older than ten years, it may be wise to purchase a homeowner warranty. Many items may start to show wear-and-tear at this point. Structural items as well as appliances may start to kick the bucket at the decade mark. Newly constructed abodes with all new appliances may be safe enough without the additional coverage. A home inspection may also point out some parts that are iffy or reaching their ends of life.

- Who buys it: If the seller purchases the warranty, it may attract more buyers and also be a deal sweetener. It may give wary buyers a bit more confidence which could push them to sign on the dotted line. This may be well worth the few hundred dollars it costs for a one year premium. If a buyer springs for the policy, this might give them the peace of mind they may be looking for.

If a person or couple decides to commit to a mortgage and all the maintenance costs that come along with it, they may feel financially stretched. Knowing that many items will be replaced by the warranty company if they break down can provide some relief. Even if the seller pays for the first year, the mortgage holder can choose to extend the coverage into future years.

- Company reputation: Some businesses are highly ethical while others are not. It would be wise to shop around for a reputable guarantee provider. Ask realtors, read online reviews and question friends, neighbors and family members about their experiences with various companies. Realtors will probably have the most history due to their multitude of clients. Real estate agents want their customers to be satisfied so will likely only recommend the most ethical of the insurers.

- Coverages: Policies vary regarding the specific coverages. Some examples of items covered include appliances such as hot water heaters, refrigerators, stoves and dishwashers. Major systems such as plumbing, electrical, roofing and HVAC units may be covered by certain policies, too.

Swimming pools and built-in spas may be covered with a special addendum. Homeowners should realize that there will be a deductible and service call charge. It’s a good idea to do the math on whether it’s a good financial deal or not, depending on the items covered and cash outlay.

Buying a house is a big decision. It can be exciting as well as a bit intimidating. Purchasing a homeowner warranty may be a wise decision to cover a broad range of “what if’s.” Some individuals may decide to just create an emergency fund of their own with the two-hundred or three-hundred dollars and add to it over time.