Buying a home is undoubtedly one of the most significant commitments you will ever make, and it’s natural that you want to make sure the process runs smoothly. The last thing you want is to find out that there is something seriously wrong with your new home right after you move into it.
Enter the home protection plan or warranty, which will cover the costs associated with any major repairs. For those unfamiliar with the ins and outs of maintaining a home, this type of plan is ideal.
Who pays the home warranty coverage during a sale?
The party responsible for paying for the home warranty plan is a matter for the buyer and seller to negotiate. It would be wise to find out from the estate agent what the accepted practice in the area is. This will guide both buyer and seller to help them decide.
The most common practice is for the seller to pay for the home warranty plan because it adds to the value of the house and reduces the odds of the buyer contacting the seller to complain after closing the deal.
The costs
The cost of your home warranty plan will depend on the coverage you want. The price varies between $350-$600 per year in most areas. It is also useful to compare home warranties, as many insurers offer unique deals for homeowners. These include reduced premium rates or additional coverage at no extra charge. The payment is made once a year, and the homeowner should renew the plan annually.
How does it work?
As soon as the homeowner becomes aware of the problem, they should contact the home warranty company to put in a claim. The home warranty company has contracts with service providers in the area who will do the necessary repairs.
The allocated service provider contacts the homeowner to schedule an appointment to do a thorough inspection of the problem. The service provider makes the repairs required, and the home warranty company pays for it. If it is impossible to repair an appliance, it will be replaced, provided the plan allows for this.
There is a small copayment or trade fee the homeowner pays for the service provider’s visit to the house. It is usually no more than $100. The amount will form part of the terms and conditions of the plan, and the homeowner can negotiate this with the home warranty company.
What is covered?
The type of plan you choose will dictate what is or isn’t covered by the home warranty plan. It is vital that you understand the contents of the plan so that you don’t get caught unawares, finding out from the fine print that something you thought was covered isn’t.
Ask to see a sample policy so you can see a full list of covered items. If you feel you need additional coverage, find out about other plans on offer to see if they better suit your needs.
Withholding payment
There is a chance that the home warranty company will deny your claim. The grounds for denial include damages caused by a preexisting problem that was disclosed during a home inspection, a failure to follow installation protocols, code violations, and a lack of maintenances.
A list of the circumstances under which denial will take place should appear on the plan. Read it carefully before you commit to paying for a plan.
Denial of payment from the home warranty company isn’t the end of the road for you. Follow the correct procedures to dispute the decision and get your claim paid. Make sure you have adequate grounds to lodge a dispute and that you have the necessary proof and documentation.