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Coverage for the what-ifs of homeownership

by Elise Riley on Feb 5, 2016

You are moved in and loving your brand-new home. You’ve got new air conditioning units, a new garage door, new appliances — new everything. Most likely, nothing will break down or go on the fritz for quite a while — however, what happens if the dishwasher dies or the concrete in the driveway cracks?

Safety nets

The good news? Warranties offer a safety net to homeowners who encounter an unexpected hiccup in their home.

Depending on what it is that has gone wrong, the feature, finish or appliance is typically covered for at least a year by the builder and/or the manufacturer. For items such as a roof, foundation or termites, the warranty can extend even further.

But once those initial warranties expire, what then?

Understanding home warranties

Prior to the time that builder and manufacturer warranties are scheduled to expire, experts recommend that you investigate and consider purchasing a home warranty policy on your own.

“When my clients are purchasing a resale property, I always recommend that they get a home warranty,” said Sammy Glassman, an associate broker with HomeSmart. “On a new-home purchase, I give my clients the information upfront and tell them to expect to do something within the year.” 

Warranty or insurance?

It’s important to know the differences between home warranties and homeowners insurance. While these might sound like similar types of coverage, they are quite different.

“If you have a fire, a burst pipe, if somebody vandalizes your home — those things would be covered by your homeowners insurance,” said Catherine O’Neil, ombudsman for the Arizona Department of Insurance. “The homeowners policy doesn’t cover normal breakdown from wear and tear.”

Finding a policy

Finding a home warranty is relatively simple.

“If you use a real estate agent, ask for a recommendation,” O’Neil said. “Talk to friends and family who have policies. You can also call our consumer affairs division and we can provide some information about service companies and home warranty contracts.”

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