Look Into a Total Home Protection Plan

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When a family puts every last dime into purchasing their dream home, whether it is a custom-built new home or an existing home, they don’t have a lot of extra money to spend on surprise repairs to home appliances or heating systems. One way to keep unexpected repair costs down for a year or two is a total home protection plan. This home warranty plan can be supplied by the seller, by the Realtor, or purchased by the home buyer. The home warranties supplied by sellers and Realtors will be pretty basic.

Warranty plans purchased by the home buyer can be customized and more complete. Many buyers consider a home warranty as part of the home-buying expenses.

What is a Home Warranty?

A home warranty is like a renewable home insurance policy that covers repairs to home systems and appliances when they break down. It will also cover replacement costs for appliances that cannot be repaired and must be replaced. The home buyer pays a yearly policy fee and then pays a small service charge each time a service call is requested.

Contracts vary, and terms must be carefully checked by the home buyer. There are different levels of coverage to consider. Some home buyers only want coverage for a few basic appliances and others want coverage for all the appliances and home systems.

This coverage is entirely different than the required homeowner’s insurance policy. Homeowner’s Insurance is meant to protect the homeowner from the home’s structural damage, damage to personal property, and other items in the policy in case of disasters such as fire, theft, or other covered disasters. Often, flood insurance must be purchased separately.

A total home protection plan is a term used for the most comprehensive plans home warranty companies offer. It will cover most of a home’s systems and appliances. This will come at a higher cost than a basic home warranty. Each warranty company has several plans to offer its customers. There are also home warranty add-ons available.

What Do Home Warranties Cover?

Home warranties cover home systems and appliances such as:

  • Furnace
  • Air conditioning
  • Plumbing
  • Water Heater
  • Electrical wiring and panel
  • Refrigerator
  • Washer and dryer
  • Dishwasher
  • Built-in microwaves

Coverage add-ons that are available can include a wine cooler, a second refrigerator, roof leaks, septic systems and pipe leaks, water softeners, and more. Swimming pools and spa equipment may be added. The well pump may be added.

Walk around a house to be purchased and make note of all appliances and systems that are older. Decide which appliances should be covered by the home warranty. Read the proposed agreement carefully to make sure all the appliances and systems you requested are listed as covered. Read the home warranty carefully to note the conditions under which appliances and systems will be covered and read the exceptions.

How Does a Home Warranty Work?

The home warranty company has its own service providers to carry out the plan coverage. When an appliance or system breaks down, the homeowner looks at their contract to make sure it is covered. Next, they call the warranty company for a service call. The service provider will come to the home and inspect the appliance or system to make sure the damage is covered. Then, they call the warranty company with a report. If the warranty company approves the repair, the service person will go ahead and make the repair and collect a service fee.

Deciding if a home warranty is right for you depends on how old appliances and systems are and what condition they are in. A brand-new home will have its own builder warranty.

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