The home warranty is the protection that follows you and your home, no matter where in the country you end up moving. Almost every major home insurer in the United States offers guaranteed replacement-cost coverage, which means they’ll reimburse you for materials and labour up to an agreed-upon price. If you move to a different state, in most cases your warranty will follow suit. What’s not transferable and can change is the coverage scope of your policy.
What is a Home Warranty?
A home warranty is a service contract that covers the repair or replacement of major home systems and appliances. Home warranties are usually purchased by homebuyers as an add-on to their homeowners insurance policy. Some home sellers also purchase a home warranty to offer buyers additional protection and peace of mind.
How Does a Home Warranty Work?
A home warranty is a service contract that covers the repair or replacement of major home systems and appliances. Home warranties are usually valid for one year and can be renewed annually.
When a covered item breaks down, the homeowner contacts the home warranty company to request service. The home warranty company then sends a contractor to diagnose and repair the problem. If the item cannot be repaired, the home warranty company will provide the homeowner with a credit to use toward the purchase of a new appliance or system.
Role of Manufacturers in the Warranty Program
As a home seller, you may be wondering if your home warranty will transfer to the new homeowners. The answer is maybe. It all depends on the terms of your contract and the regulations in your state.
Most home warranties are either offered by the builder or purchased by the homeowner from a third-party provider. If your warranty was provided by the builder, it likely won’t transfer to the new homeowners. However, if you purchased a third-party home warranty, you may be able to transfer the coverage to the new homeowners.
Before you sign a contract, be sure to ask the provider if the coverage is transferable. Some companies will only allow transfers under certain conditions, such as if the home is sold within a certain time frame after purchase or if there is no lapse in coverage. You’ll also want to find out if there are any transfer fees associated with moving your coverage to the new homeowners.
If you have a home warranty and are selling your home, be sure to ask about transferring coverage before signing any paperwork. With a little research, you can ensure that your home is protected even after you’ve sold it!
When Should You Purchase a Home Warranty?
There are a few key times when it makes sense to purchase a home warranty:
- When you first purchase a home: A home warranty can help protect your home from unexpected repairs and maintenance costs during the first year of ownership. This is typically the time when homes need the most repairs.
- When you are selling your home: A home warranty can be an attractive amenity for buyers. It can give them peace of mind knowing that they will be covered financially if something goes wrong with the home after they purchase it.
- If you have an older home: Older homes are more likely to need repairs, so a home warranty can help offset those costs.
What Are the Terms of Coverage?
When you purchase a home warranty, you are typically covered for one year. However, the terms of your coverage may vary depending on the provider. Some home warranty companies offer coverage for up to 10 years, while others only cover specific items for a certain period of time. Make sure to read the fine print of your contract so that you know what is and is not covered.
Most home warranties cover the major systems and appliances in your home, such as the HVAC system, water heater, electrical system, etc. Some home warranty companies also offer coverage for additional items like swimming pools, spas, septic systems, and more. If you have any questions about what is covered under your home warranty, be sure to contact your provider.
The Ten Commandments of Home Warranties
The Ten Commandments of Home Warranties such as:
- Thou shalt purchase a home warranties when thou buyest a house.
- Thou shalt maintain thy home warranties coverage until thou sellest thy house.
- Thou shalt keep thy home in good repair and free from defects to keep thy home warranties coverage in force.
- Thou shalt not make any claims on thy home warranties for normal wear and tear or cosmetic damage.
- Thou shalt not abuse thy home warranties coverage by making frivolous claims or excessive service requests.
- Thou shalt use only authorised contractors provided by thy home warranties company to make repairs covered by thy home warranties policy.
- Thou shalt cooperate with and provide access to thy home to the authorised contractors sent by thy home warranties company to inspect and/or repair covered items under the terms of thy policy agreement.
- Thou shalt pay all required deductibles, service call fees, or other charges specified in thy policy agreement before service is rendered under the terms of the agreement.
- Thou shalt notify thy home warranties company of any changes in occupancy or ownership of thy home during the term of coverage.
- Thou shalt read and carefully review the terms and conditions of thy home warranties policy agreement before purchase to be sure thou understandest what is and is not covered under the policy.
If you’re considering whether or not to get a home warranties, remember that they may transfer if you sell your home. This could give the new homeowners some financial protection and peace of mind, which might be worth the cost of the warranty. If you have any questions about whether or not your home warranties will transfer, be sure to ask your real estate agent or home warranties representative.