Home warranties come in as many packages as any other insurance you might have used. In this case we are discussing an insurance policy that might cover various systems in the house that you are buying or selling. Depending on the policy, this could include electrical, plumbing, appliances, furnace, hot water tank, septic, well, pool or spa.
Some policies will cover the house while it is listed and will continue to cover it for a period of time after closing. In many cases if there is a problem the home owner pays only a small fee to have the work done. The policy I use requires a $55 fee which is paid by the home owner at the time of the breakdown. The rest is covered.
A few months back I purchased as a closing gift for one of my buyers a standard policy and added the well rider. Turns out that a few months after closing the well pump burned out. My client simply called the phone number provided, paid the $55 fee and a new pump was installed.
Policies can be paid for by the buyer, the seller or the agent. If you are in a negotiating type of market as a buyer you could ask that the seller provide one. If you are an agent this might be something you offer as a "value added" item.
Regardless of who pays for it, this is something that you would want to at least consider while working through the process of buying or selling a home. Ask your agent for their opinion and recommendation. Like any other insurance policy or product make sure you read and understand all of the documents before signing them.........yes....even the fine print.
