Home Warranty Advisor

What A Home Warranty Doesn’t Cover

Advisor — Fri, 16 Oct 2009 05:44:56 +0000

A home warranty is good to have to cover your major systems and appliances. But, what does a home warranty not (typically) cover that you might expect it to?

Sometimes it’s hard to really read through the lines when looking over a home warranty contract but it’s important you review your particular home warranty before placing your first work order.

A home warranty will cover major breakdowns in your appliances and system but does not cover some of the following common problems a homeowner may experience:

Ice makers

Secondary refrigerator outside of the kitchen

Breaks in your plumbing caused by roots or freezing

Faucets and shower heads

Plumbing access by removing cabinets or tiles, etc.

Commercial grade appliances

Cleaning or modification of ductwork

Secondary damage caused by a covered item (ie. plumbing leak)

Any plumbing or electrical outside of the main confines of the home (leaks, spickets, outside lights, irrigation or sprinkler systems)

Portable hot tubs (must be built-in & plumbed on most home warranties)

Improper installation of existing equipment

Televisions or other electronics

Cosmetic items such as handles, knobs, dials, appliance doors

Springs or other hardware associated with your garage door opener

Slab leaks over a set limit per term

Sinks

Alarm and conference systems

Failures due to lack of maintenance

Please be aware some home warranty companies allow you to add additional coverage which may include the items mentioned above. Please ask before purchasing your home warranty contract!

Home Warranty Vs. Home Insurance

Advisor — Wed, 14 Oct 2009 19:27:52 +0000

Q: What’s the Difference in a Home Warranty and Homeowner’s Insurance?

A:
A home warranty and homeowner’s insurance can sometimes be confused but they are completely different coverages. A home warranty typically covers the home’s major systems and appliances while the homeowner’s insurance will cover theft or hazard damage: flood/fire/acts of God, etc.

What would homeowner’s insurance cover?

Personal property, furniture, clothing, jewelry etc.
Structure and contents of the home
Your living expenses if the home is not in a living condition due to natural disasters
Appliances, but only in the event of natural hazard or special circumstances.
If someone visiting your house gets injured while on your property.
It protects you from a variety of events, including fire, lightning, tree-fall, burglary, storms.

What Does the home warranty cover?

Repair and replacement of home systems and appliances, due to normal wear & tear.

A homeowner’s insurance policy generally has a much higher deductible vs a home warranty service fee. Think $1,000 vs $60.00.

Example: Your plumbing leaks for a week while you’re on vacation. Your home warranty will cover the repair of the plumbing leak and your homeowner’s insurance would cover the secondary water damage to your property resulting from the leak.

Example:Your home is struck by lightning. This would be an act of God. Your home warranty typically does not cover electrical failures due to lightning strikes or electrical surge. This is a claim you would file specifically with your homeowner’s insurance policy.

And finally, if your mortgage company requires your home to be insured, they are referring to homeowner’s insurance, not home warranty coverage.

What is SEER 13?

Advisor — Mon, 12 Oct 2009 17:58:22 +0000

Q: What is SEER 13 and How Does it Effect My Home Warranty Contract?

A:
Beginning in January 2006, the Federal Government required all air conditioning units manufactured have a Seasonal Energy Efficiency Ratio (SEER) of 13 or higher. The previous government mandate for the industry was a minimum SEER of 10 or higher. The higher the SEER rating, the more energy efficient a properly operating air conditioning unit should be.

This new law does not prevent manufacturers from making parts for older A/C systems. This new law does not require homeowners to replace their older units, nor does it require home warranty companies to replace older units if they may be fixed or repaired with available parts.

Manufacturers are even still allowed to sell SEER 10, 11, and 12 units until their entire inventory is sold out. So, if there is a need to replace an older SEER unit it may still be replaced with a SEER 10, 11, or 12 air conditioning systems while supplies last. However, if there are no older units available, and it is determined that the air conditioning system needs to be replaced, then the new system must be replaced with a newer SEER 13 unit.

Some home warranty companies were charging extra for this coverage but most do not any longer. When like models can’t be repaired or replaced, most home warranty companies will cover the additional costs of a SEER 13 rated air conditioning unit, including ductwork, plenum, and electrical compatibility upgrades without adding any premium charges to the policy holder.

However, these new SEER 13 units are much larger than older models and a replacement could mean significant structural modifications that may not be covered by your home warranty. Please read your contract to understand the complete terms of SEER 13, and how this upgrade could effect your budget if your air conditioning system should need to be replaced.

Ask Before Purchasing Your Warranty

Advisor — Wed, 30 Sep 2009 22:41:27 +0000

Q: What Questions Should I Ask When Purchasing My Home Warranty?

A: Here are 10 questions to ask before buying your home warranty contract.
Not all companies are created equally! There are many things you should consider and questions to ask before purchasing your home warranty. Sometimes these are things you may not think of before it’s too late.

So when you call for a quote, or are sitting at the closing table with your agent, here are a few things to consider before saying yes:

1. Price
You obviously want to know what the up-front cost to purchase the contract is but have you thought about the renewal next year? Almost all companies have a second-year increase on premium costs. Also, real estate agents say your warranty is included in the deal at closing. But does that mean the price has been included before or after your agreed price? Make sure that point is clear. What about the cost for each work order? Are you able to get a lower premium if you raise the cost of each service call that is made? These are all points to consider.

2. Limits
Does the company have an annual limit for all work placed? What about limits on particular items? Some companies may also have a paragraph in the contract that allows them to “buy out” your contract (usually for hundreds of dollars) rather than replacing a system or appliance at the time you have a work order to place. Most companies have limits on your concrete slab foundation if you do not have a crawl space or basement and were to have a leak (Usually $500.00 per year). Also, boilers or steam type heat systems will also be limited (Usually $1,500 per year).

3. Turnaround Time
How long will it take you to get service once you’ve placed a work order? Is there an additional fee for emergency service? How strong is the network of technicians available to that company? Most home warranty companies will allow emergency service at no additional costs so long as the repair is causing secondary damage (a major plumbing leak), there are elders and miners in the home during heat waves, or medical conditions such as asthma will also prompt for immediate emergency service. The norm for home warranty emergency service is 24 hours and 3 business days for a normal service (think dishwasher).

4. Covered Items
Are all items you’d like covered on the agreement? Most companies allow an additional upgrade for cosmetic features, code and permit fees, and more to be included in the contract. Ask your representative if this upgrade is available.

5. Proof of Maintenance
Like any warranty you will need to maintain the items you have covered. Home warranty companies will deny any work orders placed if the technician finds you have lacked to maintain the system or appliance. This is a grey area because some companies will require you keep proof of maintenance, while other companies just request the maintenance and do not cover a system or appliance if it fails due to lack of maintenance. Know before you have to place a work order and you haven’t kept your maintenance receipts.

6. Contractors
Does the company offer a public list of contractors they’d call on in the event of a work order? Most don’t, but you can ask for a sample by calling the company’s service department with, “If I were to have a leak, could you tell me a few companies you have available for a referral”? Some home warranty companies use network technicians that could be up to 100 miles away from your home depending on your location. This means slower service for you when you have a major breakdown.

7. Hours of Operation
Does the company have support open 24/7? Most major home warranty companies do, but you’ll still be bound by the next business day unless it’s a major emergency. But, it’s important that a company is open after major business hours. Also ask if there is a website available to place claims online– and if that system will slow down the process vs. phone work orders.

8. Payment Options & Contract Terms
If you’re purchasing the contract with your home it’s likely that this won’t be a problem. But, if you already own the home or are considering renewing your contract it’s important to know what the terms for payment are and also the contract length. Most home warranty companies will allow monthly payments (ask if there is an additional fee associated with this option) but the contract will still be for 12 months. You may have to pay a penalty, and also pay for the serviced you’ve received during that 12 month term if you cancel before that year is up. Are you able to cancel by phone, and do you get a refund if you cancel within the first 30 days?

9. Complaint Resolution
What options do you have if the company has denied a work order that you believe should have been covered? Ask about the complaint resolution policy before buying your warranty. Are you able to get a second opinion at no additional charge if you aren’t satisfied with the original work order? And is there a third party to make sure you are satisfied as a home warranty customer?

10. BBB Rating
What is the company rated with the Better Business Bureau? Are there outstanding complaints that have not been answered? The easiest way to do this research on your home warranty company is to head over to BBB.org and search by phone, company name, or website address.