As you go through the exciting process of homebuying, you will learn a lot about your new place. A home inspection will check the overall quality of your place. While it reveals the good, inspections also expose the bad, such as faulty electrical wiring or poor drainage. So, you can’t help but wonder about the unknown costs that might lie ahead.
There’s no way that you can predict how your newly purchased home will behave once you’ve moved in. It’s probably safe to presume that the 10-year-old heating system will hold for another decade. But your nearly new fridge can suddenly give out just a week after you’ve transferred homes. You can’t know for sure until you’re in your new home.
One way to protect yourself from these unexpected costs is to get a home warranty for your Texas home.
What Is a Home Warranty?
A home warranty will cover repair, replacement, or service of the home’s major appliances and systems, usually for a one-year term. This is different from homeowners insurance, which offers financial protection should an accident or disaster occur. Standard home insurance plans cover a home’s structure as well as belongings should a known peril, like fire or flooding, occurs. In contrast, home warranties cover damage caused by usual day-to-day wear and tear on appliances and systems.
Typical Home Appliance or System Plans
Many home warranty providers offer policies that cover either home appliances or systems, and hybrid packages that provide coverage for both. Depending on the warranty company and the plan you pick, here’s a list of what their appliance plan may cover:
- Wall Ovens
- Cooktops, Ranges, and Ovens
- Kitchen Fans and Exhaust Hoods
- Built-in Microwaves
- Built-in Food Centers
- Instant Hot Water Dispensers
- Refrigerator Ice Makers
- Freestanding Ice Makers
- Washers and Dryers
- Bathroom Exhaust Fans
- Garbage Disposals
- Built-In Trash Compactors
- Attic Fans
If a major home system malfunctions, it can lead to a significant financial burden. Fortunately, a home warranty covers systems, generally including the following:
- Central Heating System
- Central Air-conditioning
- Central Vacuums
- Interior Electrical
- Plumbing (Excluding Fixtures)
- Water Heaters
- Ceiling Fans
- Sump Pumps
- Built-in Whirlpools or Jetted Tubs
- Burglary and Fire Alarms
- Smoke Detectors
- Re-key Services
- Telephone Lines
A home warranty company may offer a standard plan that doesn’t cover all the appliances and systems in your place. Nevertheless, most providers offer add-ons at an additional cost. This makes it possible for you to get the coverage you need. Some of the common add-on items that may be included in your home warranty plan are extra air-conditioners, electronics, faucets and fixtures, septic systems, well pumps, external sewer lines, and more.
Now that you know what’s normally covered by home warranty plans and the possible add-ons the company offers, here are the things not often covered by a home warranty:
- Cosmetic Damages or Defects
- Damages Covered by Homeowners Insurance
- Items with Pre-existing Conditions
- Improperly Installed Items
- Items Currently Covered by a Manufacturer’s Warranty
- Neglected or Poorly Maintained Items
- Secondary Damages Caused by Covered Items Breaking
Besides these types of damages, there are costs that aren’t typically covered by home warranty companies. Most, if not all, home warranty providers will charge you a service fee for every broken or malfunctioning item serviced. This means that each time you file a claim for a home appliance or system, expect that you will be charged a small service fee that you will pay directly to the technician. This fee ranges from $60 to $100.
Some warranty companies also limit the total amount they’re willing to cover each year for home or system repairs. Usually, these annual caps or limits are higher if you purchase the more expensive home warranty plan.
The limits of a home warranty plan depend entirely on the policy that you signed up for. Different companies offer different packages. It’s solely up to you, then, to choose the right warranty plan that best fits your needs.