Home warranties cover repair and replacement costs for appliances and other home systems that break down. A home warranty can be purchased by a homebuyer or current homeowner, and is often paid for at closing. Builders typically furnish a limited warranty for their new homes, but the home warranties described here are different. They cover homes of any age.
Standard home warranty coverage differs quite a bit by provider. Many standard home warranties cover plumbing, appliances, and heating and cooling systems. Some policies cover the roof. You usually purchase extra coverage for private wells and septic systems or other highticket items.
Cost varies, but many standard home warranty policies range from $350 to $450 – extra to cover special systems.
Most home warranty policies are effective for one year with an option to renew coverage upon expiration. The renewal cost is often higher than the fee paid for the initial policy. Ask providers about renewal fee is so that you can compare costs.
Check the home warranty policy to see which of the following items are covered. Also, check to see if the policy covers the full replacement cost of an item.
- Electrical Systems
- Water Heater
- Heating Ducts
- Water Pump
- Stove/Cook top/Ovens
- Swimming Pool (may be optional)
Your REALTOR® will be able to provide you more information on home warranty policies.
Portions of this article reprinted from REALTOR® Magazine Online by permission of the National Association of REALTORS®. Copyright 2008. All rights reserved.