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Homeowner's insurance covers damage to household systems when they are destroyed or damaged by storms, fire, vandalism, theft, and more.

By- Bryan

Individuals must prepare for any eventuality when they purchase a home. Things break down with time, and any damage caused by normal wear and tear won't be covered by the homeowner's insurance policy. The homeowner becomes responsible for paying any fees associated with the repair or replacement of the home system or appliance in question. What can they do to keep repair and replacement costs under control?


Many homeowners choose to invest in a home warranty. What is this warranty? What are the benefits of buying the policy, and what do homeowners need to know when making this purchase? These questions and several others are answered below.

What is a Home Warranty?

A 2-10 Home Buyers Warranty functions much as other warranties do. This service contract covers the repair or replacement of appliances and systems in the policyholder's home. Most contracts renew yearly, although homeowners might find they have other options available to them. The policy covers any breakdowns associated with normal wear and tear. This differs from the coverage an individual receives when they purchase homeowner's insurance, yet countless individuals equate the two policies. What are the differences between a home warranty and homeowner's insurance that men and women should be aware of?

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How Does a Home Warranty Differ from Homeowner's Insurance?

Homeowner's insurance covers damage to household systems when they are destroyed or damaged by storms, fire, vandalism, theft, and more. However, this policy doesn't come into play when a system or appliance fails due to normal wear and tear. That's where the home warranty becomes of importance. The warranty provider repairs or replaces the system or appliance when it breaks down as a result of the wear and tear that occurs during the everyday use of the system or appliance. The coverage provided by each policy doesn't overlap. Instead, a homeowner who obtains both types of coverage find they have comprehensive protection for their household systems and appliances.

What Does the Warranty Cover?

Individuals want to know what a home warranty will cover when determining if this purchase is right for their needs. The coverage varies by the provider, but most warranties of this type cover major household systems and appliances. This includes the HVAC, electrical, and plumbing systems along with the stove, refrigerator, and washing machine. However, homeowners must carefully read the policy to ensure they know what coverage they will receive and which items are excluded.

The Cost of a Home Warranty

Homeowners often wonder if they should spend the money for a home warranty. When choosing a warranty, men and women need to review the options available to them to ensure they get the right level of coverage. For instance, a person who recently renovated their kitchen and spent a significant amount of money when doing so might find they wish to get a warranty that covers only those items found in this room. Other people, in contrast, want the highest level of coverage, one that protects the entire home. The key to keeping the cost of the warranty under control is knowing what items you need to be protected and purchasing that level of coverage rather than spending money on protection you don't need. The warranty provider becomes of great help in determining which plan and add-ons are right for you.

Home warranties make living spaces so much more liveable Service fees or deductibles come with any warranty. When a technician arrives at the home to diagnose the problem and make the repair, the homeowner pays this fee.

Service Fees

Service fees or deductibles come with any warranty. When a technician arrives at the home to diagnose the problem and make the repair, the homeowner pays this fee. Once it has been determined the repair is covered under the warranty, the warranty provider covers the balance of the bill.

Limitations

Limits and exclusions on home warranties help to keep costs competitive. Every warranty provider puts limits on the coverage they offer. When the customer reaches or exceeds that limit, they become responsible for any additional costs incurred during the warranty term.

Many people never reach this limit, and some warranty providers allow policyholders to increase certain limits during their warranty term. Men and women need to gather this information before signing with a provider to prevent unpleasant surprises in the future.

Providers put the limits into place to ensure homeowners receive robust coverage at an affordable price. System and appliance repairs can be costly, and home warranty providers work to reduce these costs. They do so by establishing a network of contractors and call on these contractors when a policyholder needs work carried out in the home. By using these providers, they can leverage cost discounts that are passed on to the customer. Often, the prices for parts and repairs come in at less than wholesale price.

Understanding Exclusions

Furthermore, warranty providers exclude certain items from the coverage. For example, the refrigerator may be covered under the plan while the ice maker built into the appliance isn't. Providers rarely cover garage doors and hot tubs in their warranty plans, and these are only a few examples. Read the contract carefully to know the exclusions before signing.

Also read: Five Reasons You Should Go For A Home Warranty

Regular maintenance falls on the homeowner, and a failure to carry out this maintenance could lead to the warranty being voided. For example, the homeowner must regularly change air filters in the HVAC system. If they don't and the unit breaks, the repair or replacement will not be covered. The warranty covers breakdowns resulting from normal wear and tear, not neglect.

Additional Coverage

Homeowners often find they have the option of purchasing additional coverage. For instance, conventional plans often exclude roof leaks, which can be concerning to homeowners. They know how much damage a roof leak can do and want to have it addressed promptly. Many warranty providers allow a homeowner to purchase coverage for roof leaks.

Washing machines and clothes dryers often land on the list of excluded appliances and systems. Ask the warranty provider if additional coverage can be purchased to include these items in the warranty. Doing so helps to reduce the cost of the repair or replacement, often to nothing more than the cost of the service call.

Licensing

Homeowners need to ask about licensing before choosing a home warranty provider. Contact the state department of insurance to learn whether the company is permitted to do business in the state. Certain states don't require home warranty companies to obtain a license. If this is the case where you live, reach out to the Better Business Bureau to learn whether the provider is accredited and what customers have to say about their service.

Premiums

Never select a warranty provider based solely on the premium. Ask each company you are considering to provide a sample contract. Compare the premium, the limits and exclusion, and the service call fee. Ask if the service call fee or deductible can be raised to lower the premium that the homeowner pays.

Reputation

When selecting a home warranty provider, take their reputation into account. Learn how long they have been in business and read customer reviews to get more information about their customer service and how quickly they respond to a repair request. Find out if the technicians are friendly and respectful of clients when visiting the home, and ask about background checks and drug testing for those who will be asked to perform the repairs. Although the home warranty company works with licensed professionals, they should ensure anyone they send to a client's home is trustworthy.

Homeowners aren't given the option of a service contractor when it comes to the repair. The home warranty provider chooses a professional from their network. However, if a licensed professional from the provider's network isn't available in the area, the homeowner may contact a service provider they are comfortable with and have them come to diagnose the problem. No repairs should be made until this provider has diagnosed the issue and the homeowner has received approval from the warranty company.

Renewals

Renewing the home warranty should be an easy process, one that requires nothing more than alerting the company to the desire to continue the policy and making the appropriate payment. Most companies simply continue the coverage with no interruption as long as the premium payment is made before the date the current coverage ends.

Transferring the Warranty

If the homeowner chooses to sell before the warranty term expires, they may be able to transfer the policy to the new owner. The homeowner needs to know how to complete this process as it differs by the warranty provider. Even if transferring the warranty isn't possible for one or more reasons, sellers should alert potential buyers to the fact they had a warranty on the home. This lets potential buyers know the home has been cared for and necessary repairs were carried out promptly. The warranty adds value to the home in this situation.

If you have been thinking about purchasing a home warranty, don't delay any longer. Homeowners who make this investment find it easier to budget for household repairs. Furthermore, they know they have a network of providers to call on when something goes wrong. The peace of mind they receive is priceless, as they know the repair will be carried out promptly and won't break their budget in the process.

(Disclaimer: This article is sponsored and contains some commercial links)


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