Home Warranty Coverage Exclusions You Should Know

The home-buying process can take a lot out of you. These can be things like finding the right real estate agent, securing a mortgage, and going through tons of paperwork. Once you are done, and you want to put your feet up in your new home, you would expect your expenses to decrease.

Unfortunately, in most situations, that is not how things play out. There is a reason why most homeowners have 2% to 3% of their total home purchase price as their annual home expenses. So, if the total house price is $200,000, a homeowner will set aside $6000 for annual home expenses.

And guess what? A large portion of your budget is dedicated to home repairs and maintenance to have a smooth life. This can be the systems like the HVAC, electrical, and plumbing, or the appliances like refrigerator, microwave oven, or cloth washer.

Think you won’t be able to able to gather as much money for these home repairs and maintenance? Don’t worry, because there is a way to reduce these expenses. The answer to troubles is home warranty plans.

We are about to talk about what home warranties are and some of the coverage exclusion situations. Let’s begin.

Explore:  Choose the Home Repair Service You Want

Key Takeaways

How Warranties Help You With Your Home Repairs

Getting surprises on your birthday is always a pleasant feeling because it is unexpected. But not all unexpected situations are pleasant, and home repair and maintenance are an example of it. You don’t want surprises like plumbing issues or home appliance malfunctions.

Home warranties are the service to help you gain peace of mind during the time when the home repairs and maintenance are due. A third-party home warranty provider covers the damages and malfunctions of your home components.

Saving a lot of money of your money will just be the start. The third-party company will not only bear home repair and maintenance costs but also find a reliable service provider to repair or replace the home component. You just have to sit back, have a cup of coffee, and wait for them to complete.

Remember, your home warranty covers damage caused due to regular wear and tear. If your home component has sustained damage from natural disasters or you have been robbed, the warranty company might not cover that.

Some of the Coverage Exclusion Situations

Home warranties are looking so good, aren’t they? You might even want to opt for a home warranty service right now. Before you do that, you would want to know about the coverage exclusions. These are the limitations where the warranty providers can deny your claim.

Let’s look at some coverage exclusions situations where you need to repair or replace the home component yourself.

Maintenance Was Not Up to Date

We said the home warranties give you the luxury to sit back and relax while the warranty providers do their thing. But you still have to report when the covered home component needs maintenance.

If the home warranty providers think you did not timely report the need for maintenance, it might be a coverage exclusion situation.

Unusual Handling and Usage

If the damage is due to home component mishandling, that might fall in the coverage exclusion category. Your home warranty only covers damages and breakages caused by normal wear and tear.

So, if you have kids having habits of constantly slamming the refrigerator door, any damage caused because of that might not be covered.

Secondary Damages

Normally, the home warranty plan covers specific home components. If the covered home component malfunction impacts or causes damage to something else, that secondary damage might come under coverage exclusion.

For example, if your refrigerator is filled with food and is covered by a home warranty plan. If it malfunctions, the warranty company will deal with fixing the refrigerator. That means the warranty providers will not cover the spoiled food that was inside the refrigerator.

The Coverage Limit is exceeded

There is usually a certain limit for your home warranty plan. Different companies have their own caps for the coverage limit. Each appliance, system, or covered home component has its own limit.

So, suppose your refrigerator needs replacing, and it will cost 3000 to the company. But your remaining coverage cap is $2000. In such a situation, you will need to pay the difference of $1,000.

Another situation you might find yourself in is if you used up your coverage limit. That means you will have the bear the entire cost of the home repairs or replacement.

Repairs by an Authorized Professional

When you have home warranty coverage, it is important to go for the professional service provider suggested by the warranty company. If you avail the services of an independent professional to fix the claim without notifying the warranty company, it may violate your home warranty contract.

This can make you ineligible for coverage, as your claim might get denied.

So, if you are facing problems with your electricity connection and it is covered in your home warranty plan, file a claim instead of calling Bill from across the road. Wait for the home warranty company to send a verified professional to your doorstep.

In certain situations, after you file the claims, the home warranty company gives you the option to choose your own professional. That is when you can look into options of hiring an independent professional.

Cosmetic Damage

Things like scratches, dents, and other non-functional damages are generally part of the coverage exclusion list. If the damage or breakdown does not impact the performance of the home component, the home warranty provider might reject your claim.

Take, for example, your microwave oven, with the paint on the exterior roughed up, and it does not look aesthetically pleasing anymore. But despite all this, it gives you fresh food to make your taste buds tingle. Those cosmetic repairs may not be covered in your warranty plan.

Conclusion

Before you go for a home warranty, it is important to understand the coverage exclusions. That will allow you to budget for home repair and maintenance, as you will know, components not covered by the home warranty.

If you are looking for a property before considering a home warranty, HAR.com can be your go-to destination. We have a large number of properties listed by sellers all around the United States. Find your dream home to live a lavish lifestyle.