If you’re thinking about selling or leasing a home with older appliances and/or systems, a home service warranty might be right for you. But what exactly is it?
To begin with, a home service insurance policy is different from a homeowner’s insurance policy which covers damage or loss following an event like a fire, hurricane, flood or break-in. A home service warranty may cover repairs to existing appliances, home systems (electrical, plumbing, heating and cooling), and limited roof leaks. A consumer can choose full coverage or partial protection, perhaps appliances only.
Every policy is different, and the technician’s service fee for visiting the property will vary. If the item can’t be repaired, most policies will replace the item. If you are trying to sell an older home with appliances and systems that have a limited remaining life, you might want to consider buying a policy that is transferrable to a new owner (this may not apply to all providers.). Have your Realtor mention in the MLS listing that a home service warranty will transfer to the new owner. Your agent might even want to upload the policy into the MLS and attach the document to the listing. That way, you’re proactively addressing some concerns that might be highlighted during a home inspection.
For a busy landlord, a service warranty can be a huge timesaver. The tenant can call the service company and set a time for a visit. The serviceman calls the landlord for credit card info, and problem solved. Hopefully.
A few years ago, I had an older house (NJ 1932) and bought a transferable policy before I listed it for sale. The home inspection discovered a problem with the dishwasher (which I never used). It was so old that the parts were no longer available, and I got a brand new dishwasher for no additional cost. So, I’m a believer.
My advice to you is to do your homework, read the reviews, and purchase the type of coverage you need. It may save you from a lot of headaches.