Does a Home Warranty Cover Pre-Existing Conditions?
Deciding whether to purchase a home warranty plan or not can be pretty challenging. There are many questions that need answers before you can make the right choice. And the question “Does a home warranty cover pre-existing conditions?” is usually at the forefront. The answer to this question is not as straightforward as a simple “Yes” or “No,” as there are certain factors that we need to consider. In a nutshell, a home warranty does not cover pre-existing conditions. But if you are working with the best home warranty company in your area, there are still chances that you might get coverage for pre-existing conditions. How? Let’s find out!
Will a home warranty cover pre-existing conditions?
The only honest answer to this question is, “It depends”. Some pre-existing conditions may be covered by your home warranty under certain circumstances, while others may not. If you are not satisfied with that answer, you might simply go with “No, a home warranty will not cover pre-existing conditions.” And, for the most part, the second answer is also quite accurate. Think about it for a moment. Let’s say your HVAC system has a severe issue requiring constant repairs. No one in their right mind will provide coverage for that, as the system is guaranteed to need repairs.
Home warranties are quite similar to insurance. In fact, there’s the same reasoning behind them. Something bad might or might not happen. The company is betting that nothing will happen and that they will collect the monthly premiums. On the other hand, you are getting all the benefits of home warranty plans, including peace of mind and added security. If a pre-existing condition makes it to that repairs are definitely going to be needed in the future, you will usually pay much more on a monthly basis to account for that, or you will not get coverage at all.
So, in a way, a home warranty can cover pre-existing conditions. Provided you are willing to pay the extra premiums, of course. But for the most part, the company will not bother even taking that risk. All in all, there are quite a few factors that determine whether a pre-existing condition is eligible for coverage or not.
Pre-existing conditions and how they influence the home warranty
The main purpose of a home warranty is to provide coverage for appliance repairs and replacements. If your appliance breaks down while you have a home warranty plan, the company will send someone to remedy the issue. However, there are many issues regarding what is covered and what is not. More often than not, pre-existing conditions mean your appliance will not be covered. Whether the home warranty covers pre-existing conditions depends on the type of condition. As far as your home warranty is concerned, there are two types of pre-existing conditions:
- Known pre-existing conditions
- Unknown pre-existing conditions
Do note that while most home warranty companies will not cover known pre-existing conditions, some companies may offer such coverage. They are few and far between, granted, but they do exist. However, their monthly premiums are usually higher due to their extended coverage. That being said, some home warranty companies may try to scam you and say that they will cover a pre-existing condition while, in fact, they do not plan on doing so. If you want to avoid home warranty scams, the best thing to do is to stick with well-known, reputable home warranty companies. Otherwise, you may be paying for coverage that does not even exist.
With that in mind, let’s take a look at both types of pre-existing conditions and how they pertain to home warranties.
Known pre-existing conditions
A known pre-existing appliance condition is one that was documented during the initial home inspection conducted by your home warranty company. As mentioned, known pre-existing conditions are not usually covered by home warranties. However, some companies have their own criteria for these conditions. For example, a home warranty company might conclude that proper maintenance criteria have been met and the appliance passes its visual and mechanical tests. For example, if you have been meticulously cleaning and maintaining kitchen appliances, there is a good chance that your home warranty will cover them. There are no guarantees, of course, and one company may offer coverage while another may not.
Either way, maintaining your appliances is all but required if you want to get the most from your home warranty. Almost every home warranty contract has strict maintenance rules that you must abide by. Failure to do so may void your coverage and leave you with extensive repair bills. If you prove that your appliances are well-maintained, you will have absolutely no issues, even with known pre-existing conditions. As for unknown pre-existing conditions, they are a whole other story.
Unknown pre-existing conditions
Dealing with home warranties and their unknown pre-existing conditions clauses may be challenging. Here’s an example. You bought a home warranty contract, and one of your appliances breaks down after a while. It is one of the main reasons why you need a home warranty plan in the first place! You then contact the company, and they send someone over and decline your claim afterward. The reason? Unknown pre-existing condition. Typically, you check the contract, and there is this little clause in it that says that your home warranty is voided if there is a pre-existing condition. There’s nothing that you can do if you do not know whether a home warranty covers pre-existing conditions or not.
This is just one of the common situations that concerns unknown pre-existing conditions, and some of the situations can get quite bizarre. That is why it is imperative to be on clear terms about what exactly is covered and what isn’t. Getting to clear terms with your home warranty company usually means doing a home inspection, one way or another.
Home inspections and why they are so important
Many home warranty companies will perform a home inspection before they draft a contract. This is done to ensure that the home warranty company knows all about the state your appliances are in. Home inspections usually involve one or more visual and mechanical tests, which serve to verify the correct functioning of your appliances. After the tests are concluded, the company parses the results and presents you with a customized contract. This contract will state exactly which appliances are covered and which are not due to pre-existing conditions. Depending on the test’s results, the company may also offer you some sort of a deal, such as an extended kitchen appliance warranty. Basically, the better shape your appliances are in, the better deals you are going to get.
The home inspection is there to provide both the company and you with tangible results. Don’t be surprised when the tests show that some of your appliances are not working as they should. But even these tests are not infallible. There is always a chance that the home warranty company will fail to identify a pre-existing condition. And that is yet another thing to consider.
If a test shows that your appliance requires repairs, the home warranty company will not pay for it. However, if the tests do not show any problems (and you have that documented), then the company will have to provide you with coverage for any subsequent repairs. That is why some home warranty companies try to avoid doing a home inspection so they can “wiggle out” of coverage due to the unknown pre-existing conditions clause. Luckily, there is an answer to this.
What to do if your home warranty company did not perform a home inspection
If your home warranty company does not offer home inspections, the best thing to do is arrange for one on your own. You can contact third-party providers to get an inspection done, and your home warranty company will need to abide by the results. Of course, you must verify this with the home warranty company first, as you might need to hire an inspection from an approved source. If the company flat-out refuses to acknowledge any kind of inspection, search for another company. Also, do note that there are many home repairs that you can do yourself to remove pre-existing conditions from your appliances. A pre-existing condition is there to be fixed, after all. If it can’t be fixed, you must replace the appliance.
After the inspection is over, you will want to send all the pertinent documentation to your home warranty company. Only when that documentation is accepted will the home warranty cover pre-existing conditions. And, more importantly, they can’t decline your claim afterward, saying that your appliances were faulty, to begin with. The inspection has been done, and there are no unknown pre-existing conditions.
As with most other things in life, there’s always a catch. Many home warranty companies will “believe your word” that all your appliances are perfectly maintained and are without any issues, only to decline the coverage due to an unknown pre-existing condition. The catch here is whether the condition was unknown to you or unknown to them. If you have the documentation that your appliances are in perfect order when you sign the contract, there’s little the home warranty company can do to deny you coverage. But if you are operating on hearsay, you can be almost certain that you will not get good mileage from your home warranty contract.
Furthermore, some home warranty plans have a waiting period. This is especially important with older homes, as you must ensure that all your appliances are in good working order for at least 2 months before the warranty start date. One of the most common mistakes home buyers make is to get a home warranty “bundled in” with their home purchase and not even read the contract. They will go on believing that their policy will protect them from any repair costs in the future. While this may sometimes be the case, it is more likely that there will be issues with coverage, especially if the company did not perform a recent home inspection. Choosing the right home warranty company is paramount, as it might save you from numerous headaches down the proverbial road.
How to choose a home warranty company
When choosing a home warranty company, there are four main things to consider:
- Company’s service agreements
- Limits and exclusion
- The cost
- Whether the company uses insured and licensed technicians
Each home warranty company will have specific service agreements. Most commonly known as simply home warranty plans, these service agreements determine the exact specifics of what will be covered and under which conditions. The service agreement itself is fully customizable, and you may work with your home warranty company to create a plan that will suit your needs. This is also where you will figure out whether the home warranty covers pre-existing conditions or not.
As for limits and exclusions, they might sometimes be hard to understand. This is where you will need to do the most work. Before you sign anything, make sure that all your questions are answered and that there is nothing unclear. The more vague the limits and exclusions are, the worse off you will be in the long run. In other words, ask for specifics and do not accept vague answers.
The cost of the policy will be primarily determined by the service agreement and agreed-upon limits and exclusions. Lastly, you must know that your home warranty company uses licensed and insured technicians. That way, you will get the most out of your home warranty.
Does a home warranty cover pre-existing conditions? The verdict
For the most part, the home warranty only covers pre-existing conditions in specific circumstances. The best thing to do is to find a home warranty company that is as straightforward about those circumstances as possible. You can find all the best home warranty companies in the country right here at the Consumer Opinion Guide. We are here to make it easy for you!