Home Warranties
Home Warranties Traditionally, home warranties have protected
homeowners from repair costs that aren't covered by home
insurance, especially the inner workings of a home--plumbing,
heating, air conditioning, and major appliances. Home warranties
are often crucial in real estate transactions because they help
home buyers as well as sellers rest more easily, safe in the
knowledge that an unforeseen problem with a furnace won't spark
a financial conflict, postpone a real estate closing, or blow a
deal altogether.
While home warranties aren't necessary for every current
homeowner, those who benefit most are those trying to buy or
sell homes.
When you buy a home, you assume the burden of maintaining a
variety of systems and appliances. Sellers are required to
disclose known problems, but can't be blamed for passing along a
washing machine or an oven that fails six months after the sale.
That's when a home warranty goes to work.
The National Board of Realtors describes home warranties as
service contracts, typically lasting one year, that cover the
repair or replacement of major home systems and appliances that
break down due to normal wear and tear. Home warranties don't
overlap or replace the homeowner's insurance policy, says Alan
Pyles, president of HMS Home Warranty. "They work
hand-in-glove," he explains. "The warranty covers mechanical
breakdowns, while insurance typically repairs the related
damage. Think of it as a cause/effect relationship: If a pipe
burst and destroyed a wall in your home, we'd repair the pipe
that burst; your insurance would fix the wall."
Similarly, if your refrigerator were to stop working while you
were on vacation, there could be spoilage, leakage, or floor
damage. Your homeowners insurance might pay for the damage to
the linoleum, while the home warranty would cover the mechanical
breakdown of the refregerator.
Generally, home warranties cover malfunctions of major
appliances such as washers, dryers, ovens, refrigerators, as
well as ductwork, plumbing, electrical, heating, and
air-conditioning systems. In some cases, or for additional fees,
the warranty might extend to garbage disposals, doorbells,
paddle fans, garage-door openers, water softeners,
trash-compactors, and built-in microwaves.
The age of the home doesn't matter as far as coverage is
concerned, as long the covered items are in good working order
at the start of the contract, explains John Yacono, vice
president of national accounts for American Home Shield, the
nation's oldest and largest provider of home warranty contracts.
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M & M Resources Unlimited, Inc.
Helping customers since 1986
www.mmresourcesunlimited.com
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