When can you purchase a home warranty?
Here’s the best time to sign your contract
A home warranty is a service contract that helps cover the cost of repairs and replacements for systems and appliances that break down due to normal wear and tear. A home warranty plan may be a good option if you want a cheaper alternative for repairs and replacements and don’t want to pay out-of-pocket for them.
Since home warranties typically cost $450 to $600 a year, knowing what they cover and when you can purchase them is important. Here’s what you need to know.
Homebuyers and sellers can benefit from a home warranty plan.
Jump to insightHome warranties offer a variety of coverage for systems and appliances.
Jump to insightHome inspections are required to purchase a home warranty.
Jump to insightWhen is the best time to purchase a home warranty?
You can sign up for a home warranty anytime, but it is recommended that you buy one right after closing on a new home. If you have an older home with aging appliances and systems that are more likely to break down, it might also be a good time to look into a home warranty plan.
Home warranties help with the costs of unexpected breakdowns, so you don’t have to pay out of pocket. If something goes wrong with your system or appliance, all you’ll have to pay is a small deductible, and your home warranty will cover the rest. For example, if it costs $600 to repair your HVAC system, you would only have to pay a $75 to $150 service fee instead of the full repair costs. This can help save you hundreds to thousands of dollars a year on parts, repairs and replacements.
Who should buy a home warranty?
Buying a home warranty is a good idea if you are buying or selling your home or have an older house. Home warranties are helpful for new homebuyers who don’t know the maintenance history of their systems and appliances. Sellers might also consider purchasing a home warranty plan to protect their home while it is still on the market to make it look more attractive to buyers.
What does a home warranty typically cover?
Home warranty plans usually cover a wide variety of appliances, such as dishwashers, trash compactors, refrigerators, ovens and microwaves. They also typically cover major systems such as plumbing, septic systems, HVAC and electrical.
Additionally, most home warranty companies offer three or more plans specialized to the customer's needs. For example, companies usually have an appliance-only plan, a systems-only plan and a total plan that covers everything in the lower plans. Many home warranties also have add-on options that allow you to add extra appliances and systems to your package. This will add to your home warranty costs, but the coverage may be worth it.
Here are some things commonly covered by home warranties:
- Ovens/ranges/cooktops
- Built-in dishwashers
- Refrigerators
- Washers and dryers
- Built-in microwaves
- Garbage disposals
- Attic and exhaust fans
- Electrical systems
- Central air conditioning
- Heating systems
- Water heaters
- Septic systems
- Plumbing
- Stoppages
- Exterior water and sewer lines
- Ductwork
- Roof leak repair
- Sump pumps
- Garage door openers
- Ceiling fans
Are home inspections required?
Some home warranty companies require a home inspection to ensure there are no pre-existing conditions before they will provide coverage. However, not all companies require an inspection before signing up for a policy.
A home inspection provides insight into what future maintenance and repairs your appliances and systems will most likely need. If the inspection report lists any problems that the original owner didn’t fix before you moved in, you won’t be able to claim it on your home warranty plan. However, if the seller does repair the problem, typically, you will be able to receive coverage at any time after.
FAQ
How long does a home warranty last?
Home warranties typically last a year, but some companies offer two or three-year plans.
Are home warranties transferable?
Yes, most home warranty plans can be transferred from the home seller to the buyer. Sellers and realtors sometimes buy a home warranty to make their home more appealing on the market, so transferring a home warranty is fairly common.
How do I file a claim?
Some home warranty companies let you file a claim online, while others require you to call their customer service line. However, the Federal Trade Commission recommends that you send a claim in writing through the mail and request a return receipt so that you’ll have a record of correspondence if anything goes wrong.
Bottom line
Home warranties provide coverage for many different systems and appliances and can be purchased at any time. These plans help cover the costs of breakdowns due to normal wear and tear. However, you might need a home inspection before you are eligible for coverage. Before committing to a contract, check out these home warranties reviewed by the ConsumerAffairs research team to find the best plan for you.
Article sources
- Cinch Home Services, “When can you buy a home warranty?” Accessed April 25, 2024.
- America’s Preferred Home Warranty, “How long does a home warranty last after purchase?” Accessed April 26, 2024.
- Liberty Home Guard, “How to Convert Home Warranty Coverage from Seller to Buyer.” Accessed April 26, 2024.
- Federal Trade Commission, “Warranties for New Homes.” Accessed April 26, 2024.
