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Q: I’m buying an older home, and my real estate agent has suggested that a home warranty might be a good choice to help cover the inevitable maintenance issues that older home systems and appliances have. But I’ve heard that some warranties are full of loopholes and that claims are often inexplicably denied. Are all home warranties scams? Or is there a way to tell which ones are legitimate?
A: A home warranty is a great option for owners of older (and newer) homes. While homeowners insurance will typically cover damage to a home caused by accidents, weather, and specified perils, it does not cover maintenance or repairs to appliances or home systems due to expected wear and tear. A home warranty, on the other hand, covers whole-home systems such as HVAC, electrical, and plumbing, along with major laundry and kitchen appliances and other systems and appliances based on the policy. For owners of older homes, this can be reassuring; in exchange for an annual fee and a preset service charge fee, a home warranty company will dispatch qualified technicians to repair burst pipes, shorted-out electrical boxes, failed air condensers, and washers that won’t spin. Based on the terms of the warranty, each claim will carry a service charge, which is also declared in the policy documents. The technician will correct the problem; some home warranty solutions include repair of the problem or, if necessary, replacement of part or all of the system or…
