What is a 'Home Warranty?'
A home warranty is like an insurance policy. In fact, in some states the Insurance Commission may even regulate them. I know in Texas, the Real Estate Commission regulates these companies. Basically as a homeowner you pay a company a few hundred dollars a year to cover the major appliances and components of your home. If something should go wrong, you call them up and they send a technician out to size up the situation and tell you if you're covered or not.
Is this too good to be true?
Problems for some consumers usually arise when they have a claim. They may have paid their dues each and every year and believed everything in their home was covered. Then one day in August the A/C goes out and they call the Home Warranty Company who sends a tech out to look at the A/C. "Yep" he says "Your A/C equipment is shot, you're going need a new one." "Good thing I have this warranty" you think. You may soon find out that your warranty will not cover a new A/C because you failed to have it "serviced" each year or because the service tech says the reason it went out was because of a "Pre-existing" condition.
I've seen claims denied for very questionable reasons. Stop and think about it, if they can deny a claim, then that's money in their pocket. Someplace in that fine print I keep telling you to read there is a whole bunch of "we won't warranty it 'if's'." The Technician who comes to your home may be the one who'll decide whether or not the work will be covered by the warranty. In some instances, these third party contractors who are hired by the warranty companies do not make as much on repairs and replacements on a claim as if you just called them up out of the phonebook. It pays to get several opinions before making a decision.
Here are a few reasons I've seen Home Warranty Companies deny claims
· Lack of regular maintenance
· Pre-Existing conditions
· Questionable 'Code' issues
· Components not installed per the manufacturers installation instructions
The best way to protect yourself if you plan on purchasing one of these policies is to call the Company and ask them which service provider they use in your area. Then call that service provider and schedule an inspection with them to come out and look at the systems and components in your home to ensure the Home Warranty Policy will cover it. Get it in writing if they says everything will be covered.
You also want to make sure what the Home Warranty will cover and what it doesn't. I've never seen a policy with blanket coverage so don't assume it will 'cover everything in the home' like some real estate agents tell you. Read the fine print!
What are my options if my warranty company denies my claim?
I'm betting that most states regulate these companies some how. Check with your states Attorney Generals Office. They should have all the information you need. You may even be able to file a complaint with the AG's office of your state if you've had a denial of a claim in which you feel is legitimate.
Good Luck and read the fine print on those contracts!
Donald Lawson is a Professional Real Estate Inspector licensed in Texas (#5824) and Oklahoma (#454). He currently owns and operates V.I.P. Home Inspections, a multi-inspector firm in Houston Texas. You can find out more about home warranty's on his website at http://www.best2inspect.com
Condo-hotels have evolved as a better, more reliable second home... Read More
1. What is an escrow?Escrow is defined as a process... Read More
Real estate agents, Canadian citizens and foreign investors interested in... Read More
In a previous article we introduced you to the concept... Read More
Consider these parameters for a real estate deal:Property Value: $250,000... Read More
History repeatedly serves to show us that the real estate... Read More
Be careful when buying rental property. We stayed at a... Read More
Renting a house or a room in your home is... Read More
1.Why are there so many properties on leased land?There are... Read More
A bit about VeniceVenice, Florida was named by an early... Read More
Identity theft has been a hot topic in the news... Read More
Avoid 12 Common Mistakes Made by Novice Investors and Ensure... Read More
Seems almost every situation in our lives is centered on... Read More
How do you decide whether to sell your home (or... Read More
By learning what you need to know and preparing how... Read More
If you are making the transition from renter to homeowner,... Read More
A new business venture to help home sellers, home staging,... Read More
Those new to real estate investing often fail to take... Read More
Keeping your existing house when you buy a new one... Read More
So how do you find the best foreclosures. Its not... Read More
Financial literacy is the means of empowering consumers to make... Read More
When real estate note brokers purchase partially paid notes, they... Read More
When you sell your home, appraisers use comps (comparable market... Read More
Buying Off PlanIt can be difficult to decide when every... Read More
It is increasingly common for individuals to own more than... Read More
Equity lender, hard money lender, private investor or what ever... Read More
If you are in the home buying or selling market,... Read More
Unlike traditional residential real estate mortgages, real estate investment financing... Read More
The Real estate market in Spain keeps gaining momentum and... Read More
Aloha! If you are interested in choosing a Maui income... Read More
Property Condition - Seller's What to Expect During the Inspection... Read More
The last downturn of the global stock market saw millions... Read More
The real estate market buzz across the country these days... Read More
If You want to be Financially Successful you need to... Read More
As a native Midwesterner, the first thing I noticed when... Read More
As a Professional Real Estate Inspector I get to see... Read More
Buy HUD homes are sometimes the cheapest option available for... Read More
Whether it's a lakefront cottage or a log cabin in... Read More
Finding a lotPlanning for your new home is a very... Read More
Whenever you own a piece of land, you will be... Read More
Typical log home company advertisements in popular log home magazines... Read More
By being creative, you can play the game of real... Read More
Never has there been such an ambitious and creative drive... Read More
Lower Your TaxesTax incentives for real estate investors can often... Read More
My husband and I were eating breakfast at the Good... Read More
Sheriff's Deputy Ted Rasmussen was thinking about Carrie-his pregnant waitress... Read More
Fractional shares ("fractionals") are sometimes confused with other vacation property... Read More
A Specialist Article For Those Interested In Real Estate Development... Read More
You shower, shampoo, dress your best, check to see if... Read More
Do you have bad credit, no credit, filed a bankruptcy,... Read More
Most business owners will, at some point, want or need... Read More
If you're selling your home, there are going to be... Read More
Not so, says the author of this article and four... Read More
I know many investors step into the game of real... Read More
Please don't call it "flipping."Some real estate investors who practice... Read More
If you are selling you own home, you need to... Read More
You'd like to buy a vacation home, but you're not... Read More
Each element has a specific color associated with it. Because... Read More
Choosing the wrong Home Inspector can cost you a lot... Read More
I was in the rental business for seven-years, made 1.3... Read More
One of the biggest problems individuals just starting out have... Read More
Staging can involve minimal effort on the part of a... Read More
Although real estate bankruptcy cases no longer dominate the bankruptcy... Read More
Home Buying Don'tsYour home buying process is well underway. The... Read More
Selling income property isn't like selling a house. You can... Read More
Are you ready for the lesson that will put you... Read More
Real Estate |