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What are Existing Home Warranties?

Existing home warranties are actually service contracts. Unlike new home warranties, they generally do not cover structural damage. These warranties are limited in scope and can cover some appliances and some systems such as plumbing over and above a deductible amount (commonly know as the service fee). A typical policy covers such things as the furnace, air conditioning, electrical system, kitchen appliances, air conditioning and interior plumbing. Separate warranties may need to be purchased for such items as refrigerators, washers and driers. These policies are generally designed to cover appliances and systems that are in working order when the home is sold. Yet, there is much exclusion to the coverage. Therefore, be sure to read and understand the details of the warranty. The seller usually pays for the warranty out of the closing proceeds.

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June, 2012

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