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Buying a Home
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Home warranties Home warranties are one-year insurance policies that cover existing homes. A one-time premium of $300 - $500, which either the buyer or seller can pay, provides one year of insurance. It generally covers major home systems (including electrical, air conditioning, heating, and plumbing) and built-in appliances. Ovens, water heaters, and dishwashers are usually covered, but refrigerators usually aren't.
Generally, a policyholder who has a problem with a covered item calls the warranty company, which sends a repair person. The policy-holder pays the deductible--usually $50 or $100. The benefit to buyers is obvious--it can protect them from high repair costs. That, in turn, offers security to sellers--if something does go wrong after the sale, they don't have to worry about who's responsible. Policies vary--some cover roofs, others don't; some cover preexisting conditions, others don't--be sure to read the fine print.
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