Different regions require different emphasis on what is covered. In the Sunbelt, for example, air-conditioning and pool coverage are important, but in the Northeast, furnaces and sprinkling systems are a primary concern. Regardless of the area you live in, the important things to look for in choosing a policy are:
- Make sure the insurer is financially sound and has a good track record. The best policy is worthless if the company goes bankrupt. Look for companies tied in with substantial national corporations that usually advertise in your local Yellow Pages. Check with a real estate broker or two for companies they have had good experiences with. Also, it doesn’t hurt to verify customer references or check financial filings at the department of real estate or insurance.
- Read the policy through and make sure you understand what is and is not covered as well as what the company charges for the service fee. On the average, most service fees run in the $35–$50 range. But remember, it’s a matter of trade-offs, and the lowest service fee is not always the best deal.
- Look carefully at the ‘‘preexisting conditions’’ part of the policy. Does the insurer require a presale home inspection before the policy becomes effective, and is there a time period before certain items are covered after you move in?
- Make sure the optional coverage you want such as on a swimming pool, air conditioning, or refrigerator is included. If a seller is furnishing only a bare bones policy, you may need to pay the extra cost for the options you want. It’s a good idea to read over the policy before closing, not when you’re moving in and the air conditioner dies on the hottest day of the year. That’s a bad time to find out that the seller gave you only a basic policy.
Interestingly, a recent National Home Warranty Association survey of the California market found that 56 percent of the sellers bought policies to avoid potential lawsuits, complaints, and disclosure problems arising from the sale.
No comments:
Post a Comment