What You Must Know About Home Warranty Contracts

Home warranty contracts and real estate are almost synonymous. A number of real estate agents offer such contracts to individuals who are either buying or selling homes. However, very few people rarely know how to use the contracts, what is covered and what is not.
How is a warranty contract useful to your home or real estate business? It is a source of security to the home. The person, other than leaser, seller or buyer, is compelled by the contract to replace or repair all or any structural component, utility system, or appliance of the residential property following a malfunction, wear and tear, inherent defect or deterioration at an agreed fee. The contract will therefore cushion the homeowner from pricey repair and replacement costs.

What Home Warranty Contracts Never Cover

However, you should know the scope of your home warranty agreement if you are to benefit from it. Some homeowners will either ignore insurance policies or take less cover because they think that the warranty contract can fill in the rest. This is certainly a mistake since the warranties are not insurance policies. You should take a policy and only take the home warranty for the benefits that your guarantee and collectible insurance policy do not cover. Utmost care is extremely necessary to ensure that the warranty is not a duplicate coverage to your insurance. Remember, the warranty is only usually considered as an excess coverage.
The home warranty service will also exclude maintenance contracts, service contracts, performance guarantee, or the warranties that are offered for sale or are sold by any seller, installer, builder or manufacturer of any of the structural components, utility systems or appliances of your home. Home warranty contracts are only as valuable as your level of information about their extents of coverage.
Important Dos before Signing the Contract
It is the responsibility of the homeowner to read the warranty carefully. Check to know the process of getting the home warranty company to arrange for the repair. Will you only make a phone call or you will have to go to their office to make a claim.
Who has the power to decide when a replacement or repair is necessary? Most of the home warranty contracts will give this power to the warranty company. You must however insist that the parts be replaced by those of equivalent products. For instance, when your home washing machine breaks down and the warranty company decides that a replacement is necessary, they may decide to give you a functional machine but of different quality.
Some contracts have deductibles but homeowners rarely take time to find out beforehand whether the deductibles are only for every service call or for every repair. For instance, if the deductible is $25 and both your kitchen and bathroom plumbing break down, will the cost be $25 or $50. Find out in advance whether you will be required to pay some fees for every service call, and the amount that will be charged.
You should also know whether the service contract is transferable after you sell your house and the procedure to be followed during such a transfer. Can a refund be given if you decide to cancel your warranty? Check the terms under which a cancellation is allowed, if there is a cancellation fee and whether all the fees attributable to the remaining term are refundable.