Goodspeed: Two types of home warranties available

LINDA GOODSPEED
Correspondent

QUESTION:What is covered under a home warranty?

ANSWER: There are two kinds of home warranties: Existing home warranties and new home warranties, which are provided by either the builder or manufactured products used in new homes like roofing material.

Home warranties are contracts that cover the repair or replacement of a home’s mechanical systems and appliances. A typical plan will cover a home’s electrical, plumbing and heating and cooling system, as well as many appliances.

Plans add or subtract items from the list of things they cover so make sure you buy the right plan for your circumstances. Optional coverage may include an additional refrigerator or additional freezers, pools and spas, septic system, well pumps and other appliances and home systems. Optional coverage items will have additional, specific cost for each item added to your plan. Some plans offer levels of coverage - for example, platinum, gold, silver, etc. - that bundle different coverages together for one price, which is often cheaper than adding on each item separately.

Some warranties may also offer you a workmanship guarantee for a specific period of days. So, for example, if the air conditioning stops working and you need to call a repairman and pay for a service call, and then it stops working again 30 days later, or whatever the specified period of time in your contract, you won’t have to pay another service fee to fix the same problem if it happens during the covered period of days.

A home warranty will only cover items that are in good working order on the day of closing or the agreed-upon date of the start of the plan. It will not fix something broken or nearly broken at closing. If you buy a home with a rundown washing machine that breaks two weeks after closing, do not expect your warranty to cover the cost of its repair or replacement.

Depending on the plan you pick, you will have a service call fee or deductible you will have to pay. Home warranty plans usually last one year, at which time you will have to renew the plan.

Before you buy a home warranty plan, be sure to read the fine print so you know what is covered. Remember, a home warranty is different from home owner insurance, which covers your home and contents in the event of a catastrophic event such as fire, flood, theft or other events.

Linda Goodspeed is a longtime real estate writer and author of “In and out of Darkness.” Email her at: lrgoodspeed@comcast.net.