While home warranty plans are incredibly beneficial for homeowners, many people are confused by the pre-existing condition clauses. While they do get covered to a limited extent in real estate plans, regular homeowner plans don’t usually cover them. This article will tell you all you need to know about a home warranty contract’s pre-existing conditions.
Short sale homes and mortgaged homes usually do not come with a home warranty and this is why you should protect your home. Since these homes have been owned by people who knew that they were losing out, they tend not to take much care of the property. So problems could occur after you take ownership.
In case the home you are purchasing is quite new, say between 1 and 5 years, then you may skip a home warranty as most things are fine in the first few years. However, a home that is six to twelve years old will possibly start having appliance and system problems. Things like replacing the garbage disposal unit, water heater going out and repairing air-conditioning units would be taken care of with a home warranty.
It is vital to realize that Appliance Insurance plans are fine to have but it does not work for replacements and repairs of all appliances and systems at home. It is surely not a means to overlook home maintenance. Thus, understanding what your contract says will help save some heartache of what to anticipate when you call the company for a warranty in the time to come.
None of the Home Warranty Companies cover KNOWN pre-existing conditions. In order to find out an UNKNOWN pre-existing coverage, a home inspection is needed. If a problem was prominent in the home inspection report and no action was taken, it would be considered as a KNOWN pre-existing condition.
Most home warranty companies do not ask for or even acknowledge documentation as to the serviceability of anyone’s home which generates a huge loophole permitting the warranty company the choice of declining the claim based on the convenient ‘Pre-Existing Conditions’ clause.
The new homeowner lets the home warranty company know that its appliances and systems are working in good operating condition. Initially, the homeowner would be told that their word is all that is required but when it comes to file a claim, it may not be the case with the home warranty’s service technician.
Certainly, the homeowner will lose if the technician finds a ‘pre-existing condition or other unforeseen situation, as the warranty company always goes with the word of their technician.
For instance: A home inspector observed that there was a leaky faucet in the kitchen, it becomes a known pre-existing condition for the buyer. If the buyer appeals that the Seller fix the issue and the Seller gave a receipt upon repair, the buyer would then be required to ask the plumber to warrant his/her work. The Home Warranty Company will not be accountable for the repair.
However, in some cases, where the home examiner did not catch a problem or no home examination was carried out before closing, the Home Warranty Company would send a contractor to diagnose the problem. If the contractor thinks that this is not something that would have been observed, then the Home Warranty coverage will suppose it as an unknown pre-existing condition, and so repair the problem at no cost to the buyer.
Some home warranty companies may claim that an inspection is not required! However, It is safe to have a third party inspection done to protect yourself from future claim denials. Credentials would show that there were no pre-existing conditions, there were no inappropriately set up or sized systems.
Clearly, the homeowner is the victim in the long run. However, realtors who sell them the incorrect warranty product will lose a future referral. To be fair, there has not been a substitute home warranty product obtainable until now.
There are companies which do business differently. Here companies will:
You can trust the companies that require an inspection by their competent inspectors. First, you get the documents needed to establish the existence of a ‘pre-existing condition’.
If any item is flagged by inspection, you have the choice to either have it repaired and be covered by the warranty, or to not repair it and eliminate it from the warranty.
Before you go ahead with a home warranty, you should know which is the best home warranty company out there before signing up. Similarly, you should know that home warranties come at a price which range anywhere between $300 to $500. This is why you need to compare and do a home warranty price comparison before you buy one. Use Consumera to your advantage.