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Does a home warranty cover preexisting conditions?

Only some policies provide specific coverage

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A home warranty is a service contract between a homeowner and a provider. Warranties operate like an insurance plan: You pay a yearly premium, and when a covered item is damaged, you pay a deductible while the company pays for the damage.

However, insurance covers damage related to perils like theft, vandalism, fire and storms. A home warranty, on the other hand, covers the cost to repair or replace appliances and major systems.

One major caveat in the contract is a preexisting condition. Some home warranty providers cover unknown preexisting conditions, but what a provider defines as “unknown” can be tricky, and there are loopholes they may try to use to deny a claim. Learn more about what’s typically covered and how to make the most of a home warranty.

Key insights

  • Preexisting conditions fall into two categories: known and unknown.
  • Not all companies cover preexisting conditions, and if they do, it’s only for unknown conditions.
  • It’s best to get a home inspection before signing up for a warranty to uncover any preexisting conditions.

What is a preexisting condition?

In the context of home warranties, a preexisting condition is any problem, defect or damage that existed in your home’s appliances or systems before your warranty coverage took effect. In other words, it’s anything that was wrong with an item before you signed the warranty contract.

Some common preexisting conditions include faulty HVAC systems, plumbing leaks, electrical issues, appliance malfunctions and water heater defects. While these are common issues covered by a home warranty, a provider may not pay for repairs if the issue occurred before you signed a contract and the issue was easily detectable by a technician or you knew about it.

The best way to know if an item has a preexisting condition is to schedule a home inspection before signing up for coverage. A licensed inspector will check for damage and test that each appliance and system is functioning properly. You’ll receive a detailed report that outlines any repairs the inspector recommends.

Keep in mind that most warranty providers don’t require this inspection to sign up for a policy. But it’s in a homeowner’s best interest to have an accurate account of each covered item and its maintenance records. Otherwise, your provider may deny a claim and leave you with the repair bill.

» LEARN: What is a home warranty?

What do home warranties usually cover?

Home warranties offer homeowners helpful cost coverage for the replacement or repair of major appliances and systems damaged by everyday wear and tear. Coverage details vary, but most plans typically include:

  • Electrical, HVAC and plumbing systems
  • Kitchen appliances
  • Laundry appliances
  • Ceiling and exhaust fans
  • Garage door openers
  • Water heaters

Many providers also have add-on coverage for items such as swimming pools, spa equipment, well pumps, roof leaks, stand-alone freezers and central vacuums, to name a few. This specialty coverage often comes a la carte for a few extra dollars per item per month. This allows homeowners to tailor their coverage to their needs.

When a covered item breaks down, you must file a claim with the provider by phone or online. Once the claim is approved, you’ll pay a service fee (typically $75 to $125) and the provider dispatches a qualified technician to either repair or replace the item.

While the process itself is straightforward, your contract will outline the terms and conditions of the policy, and there are often many exclusions or coverage limits to be aware of. So, it’s important you understand exactly what the plan covers and get clarification from the provider before signing up.

» MORE: What does a home warranty cover?

Do home warranties cover preexisting conditions?

Home warranty providers usually deal with preexisting conditions conservatively. More often than not, they deny coverage for issues that were shown to exist before the homeowner’s policy took effect. This is why companies have a 30-day waiting period before coverage begins: It reduces the chance a homeowner can file a claim with a preexisting condition.

Preexisting conditions fall into two categories:

  • Known preexisting conditions are issues the homeowner knew existed before getting coverage and did not rectify. These also include defects that would have been easy for an inspector to notice either visually or with a simple test during an inspection, such as a leaking pipe.
  • Unknown preexisting conditions are defects that are not obvious during a visual inspection or ones an inspector cannot easily identify. You wouldn't know about them until the system or appliance breaks down.

While several home warranty providers tout preexisting coverage, they’re referring only to unknown conditions. If a provider determines that a defect is a known preexisting condition, the homeowner’s claim will be denied. This applies whether or not the item in question would normally be covered by the policy.

If a homeowner doesn’t have an inspection done before signing up for coverage or doesn’t have copies of recent maintenance records, it can be tricky to prove the condition was unknown. A technician hired by the provider can claim the issue would have been detectable, and you’ll be stuck paying full price for the repair.

The best strategy for homeowners looking to minimize claim disputes is to pay for a home warranty inspection. If this inspection is done by a licensed professional before the warranty coverage begins, there’s a higher chance the provider will honor the homeowner’s claims. A home warranty inspection typically costs between $200 and $500.

Ultimately, it’s the homeowner’s responsibility to disclose everything they know about the state of all covered items.

What should you do if your items have preexisting conditions?

If you haven’t signed up for a home warranty yet and an inspection uncovers a preexisting condition, you should get the item fixed before signing up. If you’re in the process of buying a new house, you can often negotiate for a lower price or ask the seller to repair or replace the item. Keep all records related to the repair in case you need to show them to the provider and prove you rectified the situation.

Alternatively, you can always exclude any items from the home warranty plan, which may lessen the overall cost of the policy.

If you already have a home warranty plan and you’ve filed a claim, a repair technician will inspect the item and determine if the condition counts as a known or unknown condition. Known preexisting conditions usually include visible rust, cracks or missing parts. If this is the case, the provider will likely deny the claim, and you’ll have to pay for the repair out of pocket.

Alternative options for preexisting condition coverage

Home warranty providers sometimes offer specialized coverage add-ons to help homeowners deal with preexisting conditions. These often take the form of custom-tailored extended policies that include coverage for known preexisting issues. The downside is that these benefits come with extra costs.

If you’re concerned about preexisting issues, add-ons like these are worth discussing with your provider since they could save you money in the long run. Otherwise, you’ll need to pay out of pocket for any related repairs or replacements.

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    Are there any exceptions or special cases where preexisting conditions might be covered?

    Several home warranty providers do offer coverage for unknown preexisting conditions. However, it’s rare for a company to accept a claim for a system or appliance that had a known preexisting condition.

    You might be able to purchase specialized coverage that includes reimbursement for fixing certain preexisting conditions. It’s also possible that a warranty provider will cover a certain system or appliance with a preexisting condition that’s already been properly repaired. These situations aren’t common, so it’s best to carefully read your contract and talk to your home warranty provider about any exceptions.

    How can I ensure I'm adequately covered by a home warranty?

    To make sure you get the best coverage out of your home warranty:

    • Research. Examine the details of different plans and providers, and choose the one that best fits your needs. Companies typically offer a systems-only, appliances-only or combination plan.
    • Practice transparency. Always share the full details of any preexisting conditions you’re aware of with a home warranty provider. The company can then work with you to find a plan that fits your budget and needs.
    • Read the fine print. You may think you know all the details of your home warranty policy, but you should always read the fine print. If anything isn’t clear, ask the provider directly for clarification.
    • Perform routine home maintenance. Although your home warranty covers certain repair and replacement costs, it’s still your responsibility to keep your appliances and systems in good working order. Failing to do so could affect your coverage.
    Can I purchase additional coverage for preexisting conditions?

    In some cases, you might be able to get extra coverage for preexisting conditions. Your best bet is to speak with your warranty provider about the details of your situation and find out how it can help. If you haven’t chosen a provider yet, talk to different companies about their coverage options. However, it’s best to make any repairs before signing up for coverage so you can lessen the chances of a denied claim.

    Bottom line

    Home warranties provide homeowners with partial or complete cost coverage for many home systems and appliances. However, issues that predate a home warranty’s coverage period (known as preexisting issues) aren’t usually covered by the policy.

    Whether you’re a current homeowner or in the middle of the buying process, it’s best to get an inspection, which can uncover any preexisting conditions. Otherwise, you open yourself up to the possibility of disputes with your provider and may not get coverage when you need it.

    Also, carefully read all terms and conditions when considering a home warranty, and ask your provider whether exceptions can be made when it comes to preexisting condition coverage.

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