A home warranty plan is a service contract made with a third party repair company. There are many options when it comes to home warranties and your agent will guide you to make sure you get the right coverage. The purpose of the home warranty is to make sure that you are not met with unexpected repairs or system failures during the term of the policy.
A home warranty covers all the major systems of a home. They provide insurance against repairs or failures of electrical, plumbing, water heater, appliances, garbage disposal, heating, air conditioning and sometimes they include roof, pool/spa and even building code issues. The coverage depends on the policy itself and the price corresponds with the level of coverage.
So how does a home warranty work?
If there is a problem with a covered system, you will contact the home warranty company and place a claim. They will then send a repair person to your home to assess and correct the problem. Most warranties are about $500-700/year. It’s an insurance policy against unexpected repairs. A home warranty ensures you’re never caught with an expensive repair bill. It’s a very small price to pay for the peace of mind that a home warranty provides.
As a courtesy, I gift all my clients with a home warranty plan when they purchase a home with me.