When sellers list their home for sale, usually they will offer a home warranty or a home protection plan to the buyer. It’s an insurance policy covering all of the attached appliances, garbage disposal, garage door opener, ceiling fans, water heater and many other systems or mechanical items. There are quite a few companies that offer home protection plans so it’s a good idea to investigate which one would be the best for you. There are many different plans also beginning with the basic plan with the option of adding other systems into the protection plan.
Normally buyers ask for a home protection plan to be paid for by the seller. There is a dollar amount that is put into the residential purchase agreement. That amount of money cannot be exceeded, so it is best to know what you want covered in your new home. If there is central air and heat, a pool, a spa, etc. you would want these items covered. Any item buyers want to ask for in the home protection plan, must be written into the purchase agreement or it will not be covered.
This insurance plan covers the new home for one year from the close of escrow with the option of renewing the plan for another year at the buyer’s expense. There is usually a service fee the insurance company charges, or a deductible fee to send a service representative to the house. I have seen how useful the insurance plans can be, not to mention the huge amount of money saved when a big system breaks down.
A home warranty or home protection plan is the seller’s way of telling Mr. & Mrs. Buyer that everything is in good working order now, but due to mechanical reasons, something could break or stop working so the sellers are offering this insurance policy just in case something goes wrong.
I usually ask the buyers to pick a company of their choice since they have read and researched the various companies and plans.
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