Here Are the Basics That a Home Warranty Covers

When preparing to own a house, most of our attention is focused on construction, interior design, and moving in. Rarely do we think about what could happen when that house finally becomes a home.

You’re all settled in, the furniture looks great, the kids are happy, and then you start experiencing problems with your home’s major components.

Your HVAC stops working, the ceiling is leaking, your dishwasher won’t run. These situations are less likely to happen in a well-constructed and well-maintained home, but it’s always best to be on the safe side. As a homeowner, readiness is key if you want to avoid unnecessary spending. The good news is there’s a chance you won’t have to with an Arizona home warranty.

Read this guide on what a home warranty can do for you. Let’s look into the services it covers, how much it costs, and more.

Here Are the Basics That a Home Warranty Covers

How a Home Warranty Works

First thing’s first – what exactly is a home warranty? It is a service contract offered by a warranty provider to cover a homeowner’s expense on maintaining, repairing, or replacing certain household items. It is similar to homeowners insurance in the sense that an annual premium is paid. However, homeowners insurance covers the entire structure and the homeowner’s personal possessions in case of major perils, such as hail, fire, and property crimes. A home warranty policy covers the cost of unforeseen repairs and replacement of household systems and appliances.

Home Warranty Basic Coverage

Home warranty coverage varies per warranty service provider. Most basic packages include the following major appliances and home components:

• Cooktops, oven, or range
• Dishwasher
• Garbage disposal
• Ductwork
• Electrical
• Plumbing
• Home Heating
• Water Heating

You will notice some appliances missing from the list above. They are usually considered optional services outside the basic coverage plan. While some providers include them as part of their policy, most charge a premium for the coverage of the following:

• Air-conditioning
• Built-in microwave
• Garage door opener
• Refrigerator
• Septic tank

Lastly, there are home components, more often than not, not covered by most providers. If you do stumble upon one that does, they usually charge an additional premium or offer them as part of a costly comprehensive plan. These include:

• Bathtub
• Ceiling fan
• Separate ice machine
• Home locks
• Outdoor pool and spa
• Pest control
• Roof
• Trash compactor

Home Warranty Costs

When availing of a home warranty, you must be aware of two types of costs:

• The annual or monthly premium is the fixed cost you pay, whether you have claims or not. It is the cost of your plan, which you pay over the length of your contract. Depending on your plan, a home warranty can cost $300 to $600 yearly.
• The service fee is the labor cost of the contractor or service provider employed by your warranty provider. Each repair has a corresponding service fee, ranging from $75 to $125.

While your policy will save you from shelling out big expenses, some warranty providers set limits to how much they will cover. For example, they may offer to cover up to $1,000 of a certain appliance repair. The rest you will have to pay for. It’s best to look into different warranty providers before making a decision. Discuss the details of their coverage, and make sure you are aware of any limits or disclaimers.

Length of a Home Warranty Policy

By default, most policies last for one year. However, you may opt to renew this for however long you want. This is entirely up to the homeowner and the provider. Generally, there is no limit to how long a policy can last.

Who Can Avail of a Home Warranty Policy?

Not everyone who applies for a home warranty is automatically accepted. Warranty providers first conduct a home inspection to gauge what they will be dealing with. Homeowners must fix damaged systems or appliances before finalizing their policy. In terms of discriminating between old and new homes, warranty providers accept all types as long as they are in good condition.

In Conclusion

A home warranty is a good investment for any homeowner. Even the most basic policy will help you cut down on home repair costs. For more comprehensive coverage, you have an option to increase your premium. Remember to do careful research to make sure you find the right warranty service provider for your needs.