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Brockway Realty Blog
Keeping you in touch with League City, the Galveston Bay Area, and beyond.

What is a Home Warranty?
Posted In: Buying & Selling Tips Posted by James Brockway on 01/16/2013


The last time you purchased a home, your real estate agent may have negotiated for you to receive a home warranty from the seller at closing. Perhaps you weren’t even aware that this took place or you glossed over it in the excitement of closing on the house.

It is common for buyers to request that the seller provide them a one year warranty on the house, but like insurance policies, many times the policy or warranty is stuck in a drawer after closing and not pulled out until a problem occurs. I would recommend that if you closed within the last year, you find your closing statement and see if there was a charge on it for a home warranty. If so, you may have coverage that you weren’t aware of. If you are closing in the near future, make sure your agent negotiates for you to get this warranty.

Unlike your homeowner’s insurance policy, a home warranty covers the costs of repairs or replacement of mechanical systems and appliances such as your air conditioner or dishwasher; it provides peace of mind when a problem occurs. For more information on this topic, please read this informative pamphlet from Angela Johnson with Home Warranty of America, a leader in the home warranty industry.

WHAT IS A HOME WARRANTY ANYWAY?
A Home Warranty is a service contract to help cover repair and replacement costs of a home’s mechanical systems and appliances that malfunction due to normal wear and tear during the coverage period. It is not a maintenance plan unless the warranty company provides that option. Items must be in proper working order when coverage begins. It is the homeowner’s responsibility to complete, or have completed, by a licensed technician, routine maintenance, service and cleanings of all systems and appliances. By law, a Home Warranty cannot cover the costs to repair secondary damages as a result of appliance failure and is not a form of homeowner’s insurance. Some warranty companies have a waiting period or exclude certain items for an initial period of time. Homeowners pay a small trade fee per service call for each claim. Trade fees vary between warranty companies; most warranty providers hire third-party contractors to perform jobs for set service fees. Some claims incur non-covered or out-of-pocket charges which must be clearly listed in the contract. It is extremely important to read the Limits of Liability in the brochure as they explain what is included and excluded from coverage. No plan is all-inclusive and while most providers cover many of the same items, each offers a unique service or product. The home warranty should not be used for emergencies and should be considered as a secondary form of financial assistance towards mechanical expenses incurred during homeownership. While it’s not always a fast process, home warranties have proven to save homeowners thousands of dollars and serve as a great resource for homeowners in general.

HAVE YOUR HVAC SYSTEM THOROUGHLY INSPECTED.
In Texas, HVAC is the largest, most used and expensive system in the home. Warranty Associations throughout the U.S. strongly urge home buyers to have a licensed HVAC technician thoroughly inspect (not just “service”) the heating & cooling systems prior to closing. TREC Inspectors have a limited scope of inspection and cannot detect HVAC issues that would not be covered under a home warranty. Pre-existing leaks in the coils or cracks in the heat exchanger are not covered. Many times the inspection report is a direct indicator of a possible pre-existing condition that may need to be addressed before a warranty company will cover the HVAC system. Most warranty companies will more likely consider paying expensive HVAC claims if the homeowner performed enough due diligence to prove the issues were truly un-known the general inspection.

SPEND YOUR WARRANTY DOLLARS WISELY.
To determine the level of coverage needed, consider the appliances age/condition and whether or not it may need to be simply repaired or fully replaced. Stick with reputable companies and compare lists of covered items to how much the policy pays out when it comes time to replace* the largest, most expensive systems: HVAC, ductwork, water heater, garage door opener, refrigerator, pool, etc.

Important Factors to Consider:

Somewhat Important:

  • Term and Price
  • Availability of Local Sales Rep
  • Vendor Quality
  • Claim Payment History
  • Realtor References & Market Reputation
  • Amount of “Service” of “Trade Call” Fee
  • Marketing pretenses where the same services can be easily found by local vendors at the same cost or less than the policy service fee.
Examples are: A/C Tune-Ups     Roof Repairs     Sprinkler Systems * Warranties work in wholesale dollar amounts and replacement costs are calculated on like for like capacity and feature, not always by brand name.


WHY CHOOSE HWA HOME WARRANTY?
  • 13 Month Warranty vs. 12 Months
  • Comprehensive plans range from $365 to $495
  • Trade call fees range from $60-75; paid directly to vendor
  • Local sales reps available via cell phone for assistance
  • No waiting period to place claims
  • Vendors are Realtor® referred and therefore preferred
  • Reputation for being fair about paying claims


Your Local Sales Rep: ANGELA JOHNSON
Phone: 832-236-4423
Email: ajohnson@HWAhomewarranty.com
Plans and Prices: http://www.hwahomewarranty.com/professionals/costs
LICENSED TEXAS WARRANTY PROVIDERS:
Home Warranty of America 888.492.7359 http://HWAhomewarranty.com
Allied 866-791-1200 http://www.alliedwarranty.com
American Home Shield 800-827-4636 http://ahswarranty.com
Fidelity 800-862-6837 http://homewarranty.com
First American 888-875-0533 http://homewarranty.firstam.com
Nations 888-737-7070 http://home-warranty.com
Old Republic 800-445-6999 http://orhp.com
One Guard 888-896-0014 http://oneguard.net




Brockway Realty is a full service residential and commercial real estate brokerage based in League City, serving the League City, Clear Lake and Houston, Texas markets with over 20 agents. Member, League City Regional Chamber of Commerce

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