Read Your Home Warranty Carefully


Visitors: 187

Buying a new home warranty is much like buying an extended warranty on your refrigerator or car - there are a lot of questions to be asked.

Many states have different laws regarding home warranties. For example, in California, state law allows you to sue builders for general defects for up to four years after the home is completed. You can also hold the builder liable for latent defects on major components for ten years. Why would you need the warranty if the law says the builder must pay?

We are starting to see many warranty products being offered on existing homes. You should be cautious with these products.

Start by checking with your state's Department of Insurance. The department regulates the industry. They will be able to tell you whether or not a particular home warranty company is in compliance with the state regulations.

Many advisors suggest that you should waste your money on warranties for resale homes. These warranties include standard coverage for the home's heating, electrical and plumbing systems. Your kitchen appliances are often part of the standard coverage. You can often add your air conditioner, pool, well pumps, solar components and root coverage for an additional cost.

You will often find that sellers offer the warranties. The warranty is by no means an acceptable substitute for a professional home inspection. If the seller pays for the insurance, then fine. But if you are asked to, you need to think hard about it.

Not only will you spend a couple of hundred of dollars for the plan, you will pay around a $50 deductible every time someone comes out to look at a problem.

Most plans also limit how much they pay to correct problems. You are better protected by having a professional property inspector inspect the home thoroughly and uncover the problems for you. The inspection is a better usage of your money.

But the plans are popular. Eighty percent of existing home sales include a warranty in California. If you are thinking about taking out a home warranty on your new purchase, you should ask your friends and family for referrals. You are looking for a company with a good track record of happy customers.

Make sure you shop around. Look at price, service fees, coverage and company stability. Make sure you look at all of the costs that you will have to pay and the coverage amounts. Be certain that the coverage is applicable to your home. You don't want the policy to be voided because your home is too old.

If you want to purchase warranty insurance, then go ahead. Some people do benefit from the coverage. Like all insurance, the company is betting that you won't ever make a claim. If you don't, you've lost your money.

Martin Lukac represents and , a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!


Article Source:

Rate this Article: 
Home Equity Loans - Research Your Lender Carefully
Rated 4 / 5
based on 5 votes

Related Articles:

Home Protect Home Warranty protects from the unwanted home expenses

by: Alvie Stevens (December 16, 2010) 
(Home Improvement/Security)

Cover your home with protection shield of Total Protect Home Warranty

by: Janis Trower (December 30, 2010) 
(Home Improvement/Appliances)

Total Protect Home Warranty guarantees for overcoming the home repair issues ..

by: Alvie Stevens (December 14, 2010) 
(Home Improvement)

Should You Buy A Home Warranty

by: Saman Rashid (January 03, 2008) 
(Insurance/Home Owners Renters)

Choosing Between Annual AC Maintenance and Home Warranty

by: Lora Davis (January 12, 2016) 
(Home Improvement/Heating and Air Conditioning)

Homesure Services: Serving Your Home Warranty Needs

by: Daniel Lewis (June 24, 2010) 
(Business/Public Relations)

Your Home Business... Choose It Carefully And Then Really Work At It!

by: Kirk Bannerman (December 11, 2004) 
(Home Based Business)

HMS Home Warranty protects you from catastrophic losses.

by: Christina Stanton (January 14, 2011) 
(Home Improvement)

Home Inspections or Home Warranty?

by: Wallace Conway (December 15, 2004) 
(Real Estate)

Home Equity Loans - Research Your Lender Carefully

by: Charles Essmeier (June 01, 2005) 
(Finance/Mortgage Refinance)