Home warranty

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A Home warranty is an insurance contract that covers the repair and replacement costs of home appliances. The warranty generally covers equipment and appliances such as dishwashers, plumbing systems, electrical systems etc. but the coverage varies significantly across warranty companies.

There has traditionally been debate as to the need for home warranties, because home warranty companies claim to cover all repairs, but contract terms allow them to deny claims in many instances. Many buyers have had bad experiences when repairs are needed.

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[edit] Researching and Buying a Home Warranty Policy

Home warranty reviews and ratings websites help to a certain extent in choosing a home warranty. However, buyers generally should do extensive research and are expected read contract terms thoroughly to help avoid bad experiences later. Check external links for resources that help with buying the right policy.

Anyone considering the purchase of a home warranty should ask the following questions of the company from this Home Warranty Research Checklist

1. What is the percentage of claims that your company pays out on annually ? (Don't accept dollar amounts; they don't tell you anything about how many claims were denied).

2. When ordering a warranty, what do you require regarding the state of my home to verify everything is in working condition and properly sized, installed, etc. ?

3. Do you have a 'pre-existing conditions' clause in the contract ?

4. If there is a pre-existing conditions clause, do you require a home inspection to verify the presence or lack of pre-existing conditions ?

5. If I have a claim, and I have no documentation to prove otherwise, how can I prove that a condition was not pre-existing ?

6. What if the service tech you send out says my claim is denied due to a pre-existing condition but I disagree because I know that the item was working when I orderd the warranty or that I maintained it properly ? Who's word will you go with ?

6. Do you give kickbacks (commissions, referral fees, any monetary compensation) to Realtors

(or their regional brokers), who refer your home warranty ?

[edit] Coverage

Basic coverage includes plumbing, electrical, heating systems and major appliances such as refrigerator, dishwasher, oven. Many companies charge additional coverage for appliances such as washer and dryer, which are generally not covered.

Home warranty annual premiums generally range from $300 to $450 USD. There will be additional service trace fee (deductible) of 50 to 100 dollars per service incident. Most companies do not let homeowners combine two repairs with one service trade fee. For example, if your electrical switch needs a repair and kitchen sink is clogged, you will have to pay service trade fee twice.

[edit] Controversy

Most of the warranty providers are not public companies and are not regulated by federal laws. Many homeowners have complaints about the quality of service and are dissatisfied with every warranty company. Some common complaints:

  • Warranty companies deny the claim citing homeowner's maintenance negligence
  • Warranty companies deny the claim because of a "pre-existing problem"
  • Warranty companies always repair the appliance even when it is in such bad shape as to be replaced
  • Warranty companies deny the claim

[edit] External Links

Home Warranty Reviews and Listing

[edit] References

 This article does not cite any references or sources. (February 2008)
Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed.

Home Warranty Checklist cited with permission from 'Home Warranty Secrets Exposed' by Inspector Clouseau on Squidoo.com