If you’re looking to purchase a new home, you may have run across information about home warranties. You might be asking yourself, “Are home warranties worth it?” To help you understand everything you need to know about this type of coverage, we’ve put together some helpful FAQs to answer some of the most commonly asked questions about this often misunderstood yet necessary kind of home protection. We’ll clarify what a warranty is, what it covers, and how it works. Read on to get all of your home warranty questions answered.

FAQ 1: Why Do You Need a Home Warranty?

Buying a home is a significant investment, as well as life-changing. It lays the groundwork for important life stages like raising a family or starting a new chapter in your life in the case of retirement, plus it provides a place to create wonderful lifelong memories. Homeownership changes life in other ways too, because of added financial responsibility. Having comprehensive home warranty coverage helps you cost-effectively handle unexpected repair bills for damage that can leave your home vulnerable to huge costs.

FAQ 2: What Is a Home Warranty?

A home warranty is a plan that protects covered items from a loss a little differently than an insurance policy. Primarily, it protects against breakage through ordinary wear-and-tear rather than by accidental damage.

In other words, if a power surge destroys your freezer, that's an insurance issue. If your washing machine breaks down in the normal course of doing laundry, that's a home warranty issue.

FAQ 3: How Does a Home Warranty Work?

How a home warranty works is pretty simple. A home buyer or owner purchases a home warranty plan, or it is provided by the seller of the property. The plan's coverage is set for a specific amount of time. Many times, the duration is one year. Other times, as in the case of Pulte's home warranties, the term can be as long as 10 years.

• The warranty is purchased, and coverage becomes active

• A covered item breaks down (an appliance, HVAC, etc.)

• The homeowner calls their warranty company and submits a claim

• Warranty company calls one of their preferred contractors

• Contractor contacts homeowner and schedules appointment

• Contractor arrives and does repairs

• When repairs are complete, the warranty provider pays the contractor

FAQ 4: What Does a Home Warranty Cover?

It's important to ask what a home warranty covers because you need to be aware of your level of protection. Usually, a company will offer varying degrees of protection with limitations on things for which they will pay.

The most common limitations include accidental loss or damage, a pre-existing issue, or code violations. What is usually paid for are things like appliance problems.

These types of appliances are typically major ones like:

• Washers

• Dryers

• Refrigerators

• Freezers

• Dishwashers

• Ovens and ranges

• Garbage disposals

• Built-in microwaves

It may also cover your home's systems like:

• Electrical

• Plumbing

• Water Heater

• Heating

• Air Conditioning

• Ductwork

There may be more coverage available such as telephone wiring, water leaks, and pest issues. It all depends upon your plan, so be sure to read carefully, because all policies are different.

Protection levels may include only basic items like your home's systems, such as electrical, plumbing, heating, and air conditioning. However, an upgrade might consist of your systems as well as your appliances. Sometimes add-ons are offered for an additional charge like roof coverage or pool and spa equipment. Roof and gutter coverage is essential to consider because a leaky roof can create a lot of damage to a home.

FAQ 5: What Are the Benefits of A New Home Warranty?

Buying a newly constructed property has a lower risk level for buyers because everything is brand new, but that doesn’t mean nothing will go wrong. A home warranty provides an added measure of security that can make purchasing a home less stressful, whether the home you're buying was built a few decades ago or just last week.

If you sell your home while the warranty is still active, the coverage may be transferable. This can add value to your home and help you sell it more quickly and often for a higher price.

There is no set coverage from company to company. Coverage from the same company can even vary in different states. It's important to review the documentation carefully, so you know exactly how far your coverage extends. You don't want any surprises or unexpected gaps in protection. Pulte’s New Home Warranty guarantees the home for up to 10 years.

Good luck in your home buying endeavors. May your new home bring you joy and fond memories for years to come.

Ready to find out more? Read about the difference between a home warranty and home insurance. 

Contributed to Your Home blog by Carol Youmans

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Published 7.20.19