“Is it worth it if I already have a builder warranty?”

A question we get asked a lot by our clients who purchase new construction homes is if they should also purchase a home warranty. We don’t think buying a home warranty while covered by the builder and manufacturer’s warranties is worthwhile, but once each of those perks expires, it may be worth looking into a home warranty.

What Is a Home Warranty?

A home warranty is a monthly or annual policy that protects homeowners from making costly repairs when their appliances or home systems need to be repaired. There are dozens of home warranty companies, each with its own coverage options and pricing.

What Does a Home Warranty Typically Cover?

Again, each home warranty provider has different policy options, and some are customizable to suit your needs. These are some of the most commonly covered items:

Appliances

• Washer/Dryer
• Garage door
• Fridge
• Oven
• Built-in Microwave
• Dishwasher

Systems

• Water heater
• Plumbing
• Air conditioning and heating
• Electrical system
• Garbage disposal

What Is NOT Covered With a Home Warranty?

Before purchasing a home warranty, it is so important to know that your coverage has limits. For example, if your oven breaks, don’t expect to get a new one for free. Usually, the home warranty provider will try to fix the problem rather than replace it.

There are also limits to what a home warranty will cover. Some common reasons for a claim being denied are:

• Pre-existing conditions – the home warranty won’t fix something that was broken before the policy went into place.
• Improper maintenance
• Improper installation
• Unusual wear and tear or damage caused by the homeowner – for example, if your kiddo throws a toy down the sink, and it gets clogged, the home warranty will not cover the cost to repair it.
• Cosmetic issues
• Damage caused by pests

What Is The Difference Between a Home Warranty and a Builder Warranty?

A builder warranty is not the same as a home warranty. Home warranties will only cover some repairs and replacements for systems that fail due to regular wear and tear. A builder warranty covers many items within the home, but not all. These are the items that are protected under a builder warranty:

• Major structural defects – this includes defects related to load-bearing walls, roof framing, and the home’s foundation.
• Home systems – major systems within the home, like the HVAC, plumbing, and electrical system, are covered.
• Exterior items – Items like siding, windows, and garage doors.
• Interior items – flooring, doors, trim work, and insulation.
• Workmanship – If defects were caused due to poor workmanship, like improper installation, they might be covered along with any damage that was caused as a result of the poor workmanship.

All In All…What Does a Home Warranty Do, and Is It Worth It?

A home warranty is designed to save you money on repairs that come about as your home ages. However, these repairs will take time to happen. Home warranty repairs can take weeks or more while the repair company is waiting on parts.

Home warranties can be expensive, but as long as you know what you are buying and what is not covered, purchasing one may be worthwhile. On the other hand, if you are disciplined and set aside the money you would be paying for a home warranty into a “home repair fund,” that may be just as beneficial.
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