Escrow Trust Advisors | Understanding the Intricacies of Home Warranty Plans
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Understanding the Intricacies of Home Warranty Plans

Understanding the Intricacies of Home Warranty Plans

homewarrantyThe process of buying a home most often entails a great deal of time, research and planning. As such, the last thing a new homeowner needs is the stress and aggravation associated with broken appliances in the home. One step that can assist in avoiding this involves securing a home warranty plan.

The cost of a home warranty plan is a common question that homebuyers have. Unfortunately, there is no definitive cost that can be attached. Plans can vary in cost from $200 – $500, depending on the coverage and provider.

Although plans vary based on coverage and provider, they traditionally work in the same fashion. If a homeowner encounters a problem with an appliance, they contact the warranty company. The warranty company then gets in touch with the provider it has an agreement with. The provider normally gets in touch with the homeowner to schedule an appointment to come out and fix the problem. If the problem cannot be fixed, the warranty company typically pays for the repair and the homeowner pays a small deductible.  Of course, it ultimately depends on the warranty and provider.

Here are several items that may cause an appliance to not be covered by a home warranty plan:

  • Wear and tear that isn’t deemed as natural
  • Improper care of an item
  • Faulty installation

Although the specific plan will dictate what is covered. These are items typically covered:

  • Air conditioning
  • Dishwashers
  • Furnace / heating
  • Water heater
  • Garbage disposal
  • Ceiling fans
  • Electrical systems
  • Range and oven

Similarly, items that are not normally covered may vary based on the plan and provider, but may include:

  • Sprinklers and other outdoor items
  • Washers and dryers
  • Pools and spas

A real estate agent can often be a great source for learning more about home warranty plans, pricing and typically coverage. Homeowners may also consider conducting some of their own research as well, prior to the purchase of the new home.