The last thing a home buyer wants to worry about after closing is what could possibly break or malfunction in her new home. Since that can cover a multitude of items and systems, for peace of mind, it's a good idea to get a home protection plan. It's especially a good idea to obtain a home warranty if you're a first-time home buyer with no experience maintaining a home.

Who Pays for the Home Warranty?

Now, whether the seller pays for the home protection plan and home warranty coverage or whether the buyer pays for it, will depend on your local customs. It varies. In many locales, it's normal for a seller to pay for the coverage because it's a seller benefit. Why? Because then the buyer won't be calling the seller after closing if something breaks. Many real estate agents will also give buyers a home warranty as a gift at closing.

How Much does a Home Warranty Cost?

They are fairly inexpensive, typically ranging from $250 to $400, depending on coverage. Home warranty companies sometimes run special sales and either discount policy prices or offer additional coverage for the same price. The policies are prepaid for a year in advance, at which time they expire or can be renewed.

How Do They Work?

Although specific plans provide for specific types of coverage, most operate the same way.

Types of Coverage

Because all plans differ, you will want to ask specifically what is covered. Ask your real estate agent if upgrades are available. Pay close attention to whether the home warranty company will pay for repairs to make certain types of systems or appliances compliant with new regulations.

What If I Disagree With the Diagnosis?

Sometimes a service provider will deny a claim. (See below.) If that happens or if you are unhappy with the service provided, call your real estate agent and complain. Your real estate agent, if she has a good working relationship with the representative from the home warranty company that is covering your home, well, she can seek resolution for you. Agents all over the country are going to be very upset at this suggestion, but it works. If my client calls me with a problem, I call my rep, and she eventually finds a way to work out a solution acceptable to all the parties involved.

In short, don't take "no" for an answer! Call your real estate agent.

What is Not Covered?

 

What Can Cause Denial of Payment?

 

General Coverage

 

Because coverages vary from state to state and from policy to policy, ask to see a sample copy of a policy before you commit.