What is a homeowner’s warranty, and is it useful? (Part 1)
What is a Homeowner’s Warranty? A homeowner’s warranty is an insurance policy that covers many unforeseen circumstances when buying a home. It is basically a plan to cover costs like if your furnace breaks down right after you move in, or the plumbing backs up into your basement because a tree root broke through your pipes.
Homeowner’s warranties are ideal for many first time buyers, especially those who have little or no experience with all that owning a home entails. You have to do regular maintenance, keep up on things like changing filters on the heating and air conditioning, making sure your chimneys are clean, etc. Once all the closing costs are over, and you are in your house, you can’t call the seller about any more problems, so what are you going to do?
A homeowner’s warranty can cover the high costs of repairs, which many can’t afford soon after they have purchased a new residence. Many times a homeowner’s warranty costs much less than have to fix something on their own, and getting coverage is well worth it. Where you live will depend on whether you pay for it or the seller does, and in some cases, the Boulder Realtor may offer a short-term warranty as a closing gift.
While individual plans may vary, a homeowner’s warranty works basically this way. If something in your house breaks or stops working, like your furnace, or refrigerator for example, the homeowner would call the warranty agency and tell them the problem. They call would call a company that they work with that performs repairs, and the repairman makes arrangements with the owner to access the problem. They fix it if possible, and depending on coverage, the warranty company pays to replace and install the item. The only fees charged to the client would be any service charges, usually less than a hundred bucks.
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