by Alexia Gallagher
I recently had a past client that I helped build a new home from the ground up contact me to see if they should purchase a home warranty after the builder's one year warranty expires. This prompted a long discussion about the value of home warranties and the exceptions consumers should be aware of.
Home warranties can be a great benefit when an appliance or mechanical system breaks in your home. After paying an initial cost between $400 and $800, homeowners can have a trade service professional visit their home for as little as a $75 service fee. However, the cost of the complete repair or replacement is not always covered by the home warranty provider.
Most home warranties have dollar limits on repairs and replacements during the warranty period. For example, 2-10 Home Buyer's Warranty limits the cost to diagnose, repair and/or replace the heating system to $1,500 during the service agreement period. Also, most home warranties limit the scope of repair or replacement that is covered. For example, the home warranty may cover the garage door hinges and springs but not cover the garage doors or track assembly.
Most home warranty service policies are sold in tiers and have optional coverage that can be added to the policy. Prior to purchasing a home warranty, you should read the detailed policy to ensure you understand what is covered and what exceptions may apply. Contact me if you are interested in receiving a comprehensive list I have compiled with home warranty services providers in Texas and details regarding their policies.
Regarding builders' new home warranties, you should also read their detailed warranty so that you fully understand what is covered and what limitations may apply. Most builders' new home warranties cover all workmanship and materials installed during the first year of home ownership. Some builders offer extended warranties through a third party warranty company covering the mechanical systems for 2 years and the structure for 10 years. Many of the extended warranties are not transferrable to a subsequent owner.
In addition, new home buyers receive a number of manufacturer's warranties for items installed in their new home. The majority of the manufacturer's warranties are also not transferrable to a subsequent owner. It is also worth noting that a homeowner may accidentally void the warranty by making changes to any installed components or by having their own contractors make repairs in lieu of utilizing the warranty.
Please contact me if you have questions about resale home warranties or new home warranties or if I may be of service in any way.
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