Roughly 85% of homeowners hold some form of homeowner’s insurance. While homeowner’s insurance isn’t mandatory, it’s often a prerequisite for getting a mortgage approval.

To help set the record straight, we’re going to focus on home warranties. If you’ve been wondering “What is a home warranty?” you’ve come to the right place!

What Is A Home Warranty?

There are numerous different kinds of homeowner’s insurance available. Almost half of all homeowners don’t understand what their homeowner’s insurance covers.

A house warranty is a little bit different than other forms of homeowner’s insurance. Let’s look into it a little bit further to find out how!

Home Warranty Vs. Homeowner’s Insurance

Generally speaking, a home warranty covers what’s inside the house. Homeowner’s insurance protects against unexpected things happening to your home.

So a home warranty will cover your appliances if they break down. It won’t be much use in case of fire or flood, however.

Homeowner’s insurance covers unexpected accidents, on the other hand. You’ll most likely be covered in the act of a natural disaster. Malfunctioning appliances or accidents due to human error most likely won’t, on the other hand.

What Does A Home Warranty Cover?

A home warranty generally covers all important systems and appliances as long as they’re in working order when you sign up with the warranty company. Make sure to document everything at the start of your contract, to help remove any uncertainty.

Also, ask your home warranty provider how much coverage they provide. See if you’re expected to pay deductibles or service fees out of your own pocket, as well.

How Much Coverage Do You Need?

If you have extra appliances or special considerations that need coverage, you’ll want to make sure what your home warranty covers. If you have multiple refrigerators, for instance, only one of them may be covered by your policy.

When Does Home Warranty Coverage Begin?

Generally speaking, a home warranty takes effect the moment you sign your policy. A home warranty generally lasts for 12 months.

Make sure you apply for renewal early if you’re planning on continuing your home warranty. You don’t want to have a lapse in coverage in case something goes wrong.

Is A Home Warranty Transferable?

If you happen to sell your house while you have a home warranty, your policy will be transferred to the new owners for the duration of the contract. This is at no additional cost to the seller.

The new homeowner will usually have the option to renew their policy at the end of the coverage, as well. You can also renew it for them when you transfer the policy. Check with your warranty company when you’re signing the paperwork to find out the particulars.

Of course, not all home warranties are created equally. If you’d like to learn the difference between different kinds of home warranties, you can find out more here.

Looking For More Real Estate Advice?

With over 40 years of real estate experience, we’ve seen it all and sold it all. The real estate industry has changed to become almost unrecognizable in the 21st Century. We’re here to help you make heads or tails of it all, to make buying or selling a home as easy as possible.

Whether you’re wondering “What is a home warranty?” or how to turn a garage into an apartment, we’ve got everything you need for all of your real estate needs!

If you’ve got any questions about buying or selling a home, contact us today!