When you buy or own a home, you may need to establish a number of policies to protect the structure and items inside the house. One policy to consider as a homeowner is a home warranty. Learn about home warranty coverage, including the requirements for securing this type of policy.
What Is a Home Warranty?
A home warranty is a contract, similar to an agreement with an insurance agency, that covers certain items in the home. The home warranty, which usually stays in force for about a year, covers the costs of either a repair or replacement for appliances and systems in the home. That includes cooling and heating systems, as well as appliances, like stoves and refrigerators in the kitchen. The contract also pays for issues with electrical and plumbing systems in the home. The homeowner calls a service provider recommended by the warranty service to perform the repair or replacement, then the warranty service pays the claim.
New Homeowners
One of the most common scenarios where an individual seeks a home warranty is when he has just purchased and moved into a new (used) home. The new homebuyer doesn't know how the appliances and home systems function nor if they will continue to function in the future. The warranty provides the homebuyer with the peace of mind of knowing that he can get the items repaired or replaced if they malfunction.
Requirements
The main requirement for getting coverage with a home warranty is that the covered party owns a home in his name. If a prospective homebuyer wants a home warranty, she usually must ask her real estate agent to contact the warranty company to initiate the policy. An existing homeowner can establish the policy herself. Getting a policy is a simple matter of choosing the items to cover and purchasing the warranty --- similar to buying a warranty for a television. The homeowner must also agree to pay a deductible payment to the service provider.
Suggestions
If you are in the market to buy a new home, in some cases, the real estate agent will offer a home warranty policy as a freebie. The real estate agent pays for the warranty as a perk of closing the deal. If this is not offered, ask directly if you can receive this coverage as a part of the deal. Once the initial warranty expires, you can ask the warranty company to extend the coverage for another year or more.
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