One of your biggest fears as a homebuyer may be that there is something wrong with your San Mateo Village home and it’s waiting for after you move in to rear its ugly head. It is this fear that brought about the birth of the home inspection industry in the early 1970s. Today’s professional home inspector performs a thorough investigation of a home’s components and systems that are visible to the naked eye. Even the best inspector, however, may miss something, which is why there is so much interest in home warranties.
The idea behind a home warranty is to provide financial protection for homeowners faced with the failure of major mechanical systems, such as the home’s heating and air conditioning. Home warranties provide, most of all, peace of mind.
1. Home warranties aren’t insurance
One would think that with all the hoopla surrounding health insurance, the average American would be well-versed on the subject. Insurance, health or homeowner’s, is complicated! In a nutshell, your homeowner’s insurance policy covers the home’s structure and certain personal belongings from financial loss due to theft, fire and other calamities. If your water heater is stolen, your homeowner’s policy should cover it. If it breaks down, that’s on you.
Home warranties, by the way, aren’t actually warranties either – at least according to the federal government’s definition: A warranty comes with the purchase of a product and the cost is included in the purchase price.
Since the home warranty is purchased separately from the home and it costs an additional fee, it is best described as a service contract.
2. Typical coverage
Home warranty companies offer a variety of plans and typically the more you pay, the more your plan will cover. Most of the basic warranties cover the homes major systems, such as HVAC (heating, ventilation and air conditioning), plumbing (some plans cover outdoor plumbing, such as a sprinkler system) and electrical. Some appliances are included however, the most significant that aren’t covered in a basic policy are the refrigerator, washer and dryer.
3. What’s not covered under a home warranty
Anything that isn’t covered under the San Mateo Village home warranty is known as an “exclusion,” and you’ll find these vary between companies.
Most home warranty contracts won’t cover breakdowns due to normal wear and tear. They also exclude anything damaged due to deferred maintenance, insect or vermin damage and acts of God. Structural problems, such as a leaky roof and cracks in the wall are typically not covered, although you may find a company willing to cover these for an additional cost.
4. You can buy optional coverage
Speaking of additional cost, home warranty companies offer optional coverage at additional cost. This includes coverage for a septic system, well, pool, spa and central vacuum system.
5. Are home warranties worth the cost?
The average cost of a home warranty, nationwide, is $969, although most Americans spend as little as $243 and as much as $1,702, according to HomeAdvisor.com. In the event a covered component fails, the warranty provider will send a technician to your home to investigate the problem. You will be required to pay a service fee each time a technician visits your home; usually around 60-$100.
So before you call for service at your San Mateo Village home, be sure you’re calling the right company. You need to call the home warranty company, not the company providing the repair/service. If you call a repair service directly, you’re not going to be reimbursed for the repair.
Whether or not home warranties are worth the cost depends on who you ask. Many real estate professionals feel that purchasing one during the first year of homeownership, when folks are strapped for cash, is a wise move.
In fact, most real estate companies in the Mid Silicon Valley area insist that every buyer have a home warranty with their purchase of their San Mateo Village home. Often, to avoid any argument about who’s going to pay for it, your agent will do it.
Some consumer organizations, however, may feel otherwise because they report that claims are denied too often or the warranty company will say that the problem was pre-existing. Since someone else is paying for it and, in my experience, most people use them at least once, you’re better off having one.
The Consumer Advocate site offers a list of the best home warranties; however, the one at the top of the list – American Home Shield – is one of their main advertisers.
I don’t know how much weight I would give either list. Besides, most of them aren’t available in the San Mateo Village home area.
The cost of maintaining a San Mateo Village home
Sometime after you move in, when you have nothing better to do, get those pest and property inspections out again.
You can make it easy on yourself and go right to the summary page to find the most important and immediate needs of your new home. Make a priority list of what needs to be tackled. Also take a look at the remaining likely lifespan of your major operating systems like the heating system and, especially, the roof.
If your roof has ten good years left, start saving now. Say, the roof is going to cost $15,000, you’ll be a lot better off saving $125 monthly than being surprised when you’re reminded in ten years that you need a new roof.
Seller Home Warranties
You may or may not know this, there are home warranties available for the sellers of San Mateo Village homes. They’re very similar to a buyer home warranty in what they cover. The biggest difference is the price. The price is based on the number of days the home is covered; typically $2 per day.
Murphy’s Law says you should have one.
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