Is it worth it to spend up to hundreds of dollars for a home warranty? The answer isn’t a clear yes or no. It depends. Sometimes, a home warranty could absolutely be worth it when trouble happens. Other times, you are just wasting your money.
Before you start paying, you should consider whether a home warranty is the right choice. One area of consideration should be the coverage of pre-existing conditions. In this article, you will learn more about home warranties and whether pre-existing conditions are covered.
Home Warranties and Pre-Existing Conditions
The issue of what will and won’t be covered under your warranty is an important one. Failures and repairs of appliances and systems will only be covered after coverage starts. Knowing if a home warranty covers pre-existing conditions before you close on the home can save you from nasty surprises down the road.
When one of your appliances break down and you’re facing a big repair bill, it isn’t pleasant to find out that your warranty won’t cover it.
The big question is: Will a Home Warranty Cover Pre-Existing Conditions.
The short answer is: No.
If an appliance or a system in your home has a pre-existing condition, the company doesn’t have to pay for repairs or replace the appliance. Any appliance of system that has failed prior to the start of coverage is considered a pre-existing condition.
Note: Lack of maintenance and age can be considered pre-existing conditions.
Known vs Unknown Pre-Existing Condition
Many home warranty companies won’t cover known pre-existing conditions. What determines whether a condition is known or unknown? Let’s look at the definitions.
Known Pre-Existing Condition - A known pre-existing condition is one that has been documented during the inspection and no action was taken to correct it.
Unknown Pre-Existing Condition - An unknown pre-existing condition must be uncovered during a home inspection. It is the kind of condition that likely wouldn’t have been caught by a homeowner.
Depending on the company, the following standards may allow for the coverage of pre-existing conditions:
● An appliance or system was found to be in good condition within 60 days before coverage began
● Issues could not have been detected with a visual or mechanical inspection
Importance of Home Inspections
If you’ve ever been glad that a home warranty company doesn’t require inspections, you might want to rethink that. The issue of pre existing conditions highlights the importance of a home inspection.
With a pre-existing condition clause, a warranty company can decline your claim even if you weren’t aware of an issue. Because some warranty companies don’t require home inspections or even documentation on the condition of your home appliances prior to you signing the contract, they can exploit a loophole to allege that an appliance has a pre existing condition.
To protect yourself from claim denials in the future, take matters into your own hands and get a third-party inspection done. Why?
Even if a company tells you that only your word is required to let them know that all appliances are in good condition, the word of the company’s service technician still comes first if a preexisting condition is found. While there are no guarantees of your claim being successful in that case, you can speak to customer support and offer proof that you genuinely didn’t know about the issue. It is possible that the claim could be granted.
If an appliance doesn’t pass inspection, you have the option of repairing the appliance and having it covered or just excluding the appliance.
What You Can Do As a Homeowner
After getting the inspection, be sure to send the results to the warranty company for recordkeeping. Include receipts of issues that have been fixed in order to get those appliances under warranty.
If an issue has been noted on an inspection, the warranty won’t cover it. If the home has not been closed yet, it might be possible for you to request a lower price for the home to cover repair costs yourself.
If your home is older (and it isn’t up for sale), be aware that some home warranty plans have a waiting period. You must make sure that your home’s appliances and systems are clean and in good working order for 2 months prior to the warranty start date.
Lastly, choose your home warranty company carefully. Try to search for reputable companies that require inspections or don’t have a pre-existing condition clause.
Every homeowner looking to get a home warranty should take a good look at the terms and conditions of the policy. Although a warranty doesn’t cover everything, having one can still save you money and frustration.
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