First of all, it is important to know that a home warranty insurance and a homeowners insurance are two different things. Homeowners insurance is required by your mortgage company, and it covers your personal property, and the structure and contents of your home, in the situation of an accident or disaster.
Your homeowner’s insurance will be functional if your home burns down, is damaged by intruders or a natural phenomenon, or if the water heater faces a leak and ruins your hardwood flooring and carpeting.
On the other hand, a home warranty is entirely optional. It covers the repair and/or replacement of major appliances inside the home and is normally good for a period of time. For example, when the water heater stops working (though not leaking), the oven burner doesn’t function properly (though not burning your house down), or if the refrigerator suddenly stops working, it would cover that.
Most of the times, a home seller will offer the same as an indication that the home they are selling is in good condition. After all, if someone is willing to back the mechanicals inside the home, it is not necessary that the life will become easy for the person who is buying the home, as a home warranty is no guarantee.
You will easily come across a number of well-known and reliable companies when it comes to home warranty insurance in NSW and several other areas around the world. Let’s have a look at some of the important things to keep in mind regarding the same.
They are for a particular duration of time
Most of the times, a home warranty is written for a term of one year, and it can be renewed. However, you may not receive any notice that it is lapsing, as there is very less incentive for a service provider to inform you.
They provide you with different levels of coverage
Each home warranty policy is different from one another. Basic coverage may include your furnace, air conditioner and other major appliances. Also, coverage may be limited to certain circumstances. It is their goal to convince you to upgrade to a Plus or Gold plan that will offer you better coverage. Obviously, the cost will go up substantially.
The cost varies in a big way
A home warranty policy can vary greatly, depending on the level of coverage. How good the warranty is depends on the number of loopholes written in the fine print. Most of the states have no regulations governing home warranty firms. A wise customer will confirm as in which Government agency handles home warranty companies in their state, as well as check for registered complaints and other important things before signing in.
There is a deductible involved when you make a claim
The deductible amount can vary in a big way, depending on the policy. A majority of insurance companies won’t allow you to bundle repairs, as the deductible will be applied to an individual item. If your refrigerator and air conditioner stop working on the same day, you will probably have to pay two deductibles, even though you made a claim for both at the same time.
This was your guide on buying a home warranty. Hope you find this article informative and helpful.