When can you buy a home warranty?
But where does buying a home warranty plan fit in? Should you include it in the closing process or wait until after you move in?
The short answer is: You can buy a home warranty at any time, but it’s always better to get one sooner rather than later.
Why should you get a home warranty when buying a house?
A home warranty plan works by supplementing your homeowners insurance and covering the cost of issues insurance doesn’t. It is an annual service agreement covering repair or replacement for major appliances and home systems, such as your washing machine or water heater. When something goes wrong on a covered item, you pay a small fee and the warranty covers the rest.
Whether you’re buying a well-loved house bound to need maintenance or a newly built home with a limited warranty, there’s no way to know when regular wear and tear will turn into an urgent repair. So it makes sense to put home warranty coverage on the “must-do” list when buying a house. The easiest way is to include it in the closing process.
Before signing a service agreement with a warranty company, a buyer needs to be aware of the condition of the appliances and systems in their prospective home. This is where a home inspection comes in.
What inspections should you have before buying a home warranty?
Maintenance and repair issues are among the most common hidden costs of home ownership. A home inspection helps you estimate what those future issues will be and supplies crucial information about the structural, mechanical and overall condition of your prospective home.
An inspection might visually assess some appliances but rarely includes a full mechanical inspection of all of them. You may need to add that on, along with specialty inspections for the roof, chimney or electrical system.
This matters because a home warranty usually won’t cover detectable pre-existing conditions or repairs and replacement costs due to lack of regular maintenance. If an inspection report lists a problem that the original owner doesn’t repair before you buy, you won’t be able to claim it under your new plan after you’ve moved in. Read your service agreement carefully.
If you require the seller to complete the repair and the appliance malfunctions afterward, you usually will be eligible for coverage. Proof of prior inspection and maintenance makes the claims process easier, so give your warranty company a copy of the inspection report and receipts from completed repairs.
When are the best times to buy a home warranty?
Although it’s best to get a home warranty as soon as you become a homeowner, you can purchase a plan at any time during the buying, selling or home-owning experience.
When you’re buying
One of the best times to buy a home warranty is when you are closing on your first house. Realtor Sara Hopkins says, “It’s very common for a seller to pay this expense up front.” Some home warranty companies also offer discounts when a buyer purchases a plan during or within 30 days of closing.
When you’re selling
Including a home warranty in the sale of your house will be attractive to a buyer, especially first-time homebuyers who are already juggling the many new expenses of home-buying. A one-year home warranty when buying a house takes the potential cost of repairing appliances off their shoulders for at least the first year.
When your included warranty expires
New-construction homes often include limited-time warranties, but check the terms, because many don’t cover appliances. As soon as the builder’s warranty expires, reassess your coverage and make sure your major appliances are protected. The same goes for the manufacturers’ warranties on your appliances — when they run out, a home warranty company can fill that gap.
When your needs change
When you remodel and add appliances or systems, consider buying a plan or upgrading your protection. On top of standard coverage for the essentials, you can add coverage for repair and replacement of a new hot tub or smart home system.
Before a change of seasons that risks overworking your appliances
Seasonal turnover is hard on equipment that has been sitting idle. The first cold night of the year is when furnaces fail, and the first hot week is when air conditioners give out: the components have been dormant for months, and starting up under full load is when weak parts show themselves. The same goes for sump pumps ahead of a wet spring. Buying a plan a month or two before the season turns means your coverage is active and past its waiting period by the time the strain arrives.
When does home warranty coverage start?
Your coverage start date and your purchase date are not the same thing. Unless the waiting period is waived, most home warranty plans include a 30-day waiting period between enrollment and the date coverage becomes effective. The waiting period exists to keep people from buying a plan after something has already broken and immediately filing a claim.
In practice, a plan bought today generally can’t be used for a breakdown next week. Your confirmation email and plan documents state your effective date, and your customer service associate confirms it before you complete enrollment. That’s why timing matters: if a season change or a move is coming, enrolling early gets the waiting period out of the way.
Real estate transactions are the common exception. When a plan is purchased as part of a home sale, the waiting period is often waived so coverage begins at closing — one more reason to handle it during closing.
What is a drawback of a home warranty?
The waiting period is the first one. Beyond that: plans cover breakdowns from normal wear and tear, not damage from accidents, misuse, improper installation or neglected maintenance. Detectable pre-existing conditions are generally excluded. Coverage carries dollar caps per item and per term, so a very expensive replacement may not be covered in full. And you pay a service fee on each request, on top of your plan cost. None of that makes a plan a bad deal, but it does mean a home warranty makes repair costs predictable rather than guaranteeing you never pay for a repair again.
How to purchase a home warranty at any time
A warranty plan is a wise investment for both newly built homes and well-loved, older homes. It’s also a good option for current homeowners whose appliances are beyond their manufacturer’s warranty and likely have imminent repair needs.
Get an online quote and review the terms of the protection plan carefully before completing the service contract, so you know for sure what the warranty covers. Warranty costs depend on which company you choose, where you live and your coverage needs. A good warranty company offers several coverage options, so choose the company and plan that best suit your family’s needs.
Frequently asked questions
Can I purchase a home warranty at any time?
Yes. You can enroll while buying a home, while selling one, or years into owning one. Sooner is better, because coverage only applies to breakdowns that happen after your effective date.
Who purchases the warranty, the home seller or the buyer?
Either can. Often a home seller will include a home warranty as an incentive, particularly for first-time homebuyers, because it makes the listing more appealing and covers repairs while the home is listed.
Can I use my home warranty right away?
Usually not. There is typically a 30-day waiting period between enrollment and your effective date, unless it’s waived — which commonly happens when the plan is purchased as part of a real estate transaction.
Can I purchase a home warranty after closing?
Yes. You can buy a plan after closing, though handling it during closing is simpler and may come with a discount or a waived waiting period.
When are the best times to buy a home warranty?
When you’re buying a home, particularly as a first-time homeowner; when you’re selling, to make the home more appealing; when your needs change after a remodel; when a builder’s or manufacturer’s warranty expires; and just before the seasons change.
* Subject to plan terms and conditions.
*The information in this blog library is intended to provide general guidance on home warranties, and on the proper maintenance and care of systems and appliances in the home. Not all of the topics mentioned are covered by our home warranty or maintenance plans. Please review your home warranty contract carefully to understand your coverage.
*Our blog library may link to third-party sites that offer products, services, coaches, consultants, and/or experts. Any such link is provided for reference only and not intended as an endorsement or statement that the information provided by the other party is accurate. We are not compensated for any products or services purchased from these third-party links.
