What You Need To Know About Home Warranty when Buying a Home in Arizona?
When you are ready to make an offer to your new found dream home, your Realtor most probably will ask you whether you want to buy a home warranty. In fact, as part of the Arizona Residential Resale Purchase Contract, you as buyer need to complete section 6k – Home Warranty Plan. Before we go into who is going to pay for the home warranty, let’s look at what is home warranty andf what you need to know about home warranty.
Home warranties are not homeowner’s insurance
Homeowner’s insurance generally protects the structure of your home and your possessions inside your home. Homeowner’s insurance typically covers repairs of damage to the home from theft, fire and some weather-related incidents. It also covers injuries that are caused by these types of incidents.
Home warranty is a service agreement that promises to repair or replace damaged systems and appliances, provided it meets the terms and conditions of the deal. Some things covered by a warranty would be repairs to your furnace, hot water heater or electrical system.
For example, if your HVAC is stolen, your homeowner’s policy should cover it. If it breaks down, that’s on you. If you have home warranty, the home warrarnty should cover the repair.
What does a home warranty cover?
Home warranty policies vary, but in general, most cover major appliances, as well as heating/cooling, plumbing and electrical systems. This can include ovens, refrigerators, dishwashers, garbage disposals, microwaves, washer/dryers, indoor pipes, faucets, electrical panels, wiring, furnaces, AC/heating units and ductwork.
How much does home warranty cost?
Home warranty prices vary depending on the provider and coverage you choose. Basic coverage starts at about $300 and goes up to $600 for more comprehensive plans. A homeowner can add extras if needed, such as coverage for a swimming pool and spa.
Should you buy a home warranty?
If your appliances and systems are no longer under the manufacturer’s warranty or you just want the added peace of mind, then yes a home warranty could save you money in the long run and cover the maintenance that your home insurance does not. Especially in Arizona, HVAC system is the most frequent home warranty claim.
Benefits of home warranty
A home withhome warranty provides peace of mind to the homeowner who otherwise might not be able to meet unexpected repair bills when one has already invested a lot on a house. The benefits of a home warranty plan include:
- Protects home owner’s budget by covering for costs incurred due to repairs and replacements. Normally homeowner just has to pay the trade fee or service call fee for repair
- It saves you the effort of looking for an experienced and trustworthy contractor. The home warranty company has their owned network of contractors
- Most major systems and appliances are covered under the standard plan
- Covers damages caused due to regular wear and tear
- Depending on your coverage, your device will be replaced with a brand new one if the technician declares that your broken device cannot be fixed
- Provides ongoing home protection, renewable year after year
When should I buy home warranty
Most home warranty will sell you a home warranty at any time on a house of any age, no matter how long they have lived in it. However, there may be a waiting period before you can file your claim after the purchase. If you buy a home warranty during the real estate transaction, you may get a discount. Your coverage will start on day one after you owning your home.
How do I select a home warranty plan?
Different companies offer different home warranty plans and coverage. Regardless of what company buyer chooses, the buyers should review the coverage from various companies and select the one which suits the best. Read the fine print carefully to spot coverage limitations and exclusions. Be sure to get a home warranty plan that covers “pre-existing conditions”.
Things to keep in mind
Home warranty do have a few drawbacks although they can be resolved.
- The warranty company will always try to repair and not replace your damaged appliance
- Appliances that broke due to lack of maintenance are most probably not covered
- You will still have to pay a service call fee per repair incident, even if the contractor could not repair the appliance. Also, you cannot raise multiple issues in a single claim. If at all you do so, you will have to pay separate service call fee for each issue
- Claims are sometimes denied on unclear grounds and also by quoting fine print from the contract which is usually overlooked by the customers
Home Warranty Company in Phoenix area
American Home Shield Home Warranty
Conclusion
Home warranty are a great way to insure your household appliances. They often prove to be highly helpful in protecting the budget when an appliance breaks down.
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ area, we hope you will consider us. Contact us today for complimentary consultation.
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