Will My Home Warranty Cover Pre-Existing Conditions?
A home warranty is a valuable financial safety net for homeowners when essential components of their homes break down. If you’re wondering whether a home warranty can cover pre-existing conditions, the answer is, it depends. Home warranties can indeed provide coverage for pre-existing conditions in your home, but there are specific conditions and circumstances need to be met to make it happen.
To explore the question, “Does a home warranty cover pre-existing conditions?” and to distinguish between known and unknown conditions, let’s get into this topic.
Pre-existing conditions eligible for coverage in a home warranty
Before determining whether your home warranty covers pre-existing conditions, what is considered a pre-existing condition according to a home warranty policy? In simple terms, when an appliance or household system, like your electrical system, has a pre-existing condition, it has a flaw that predates your home warranty coverage or has previously malfunctioned. These issues can arise due to a lack of prior maintenance or simply because the appliance or system is aging.
In home warranties, pre-existing conditions can be covered, but certain stringent criteria must be met. These criteria can be somewhat restrictive, and obtaining coverage for pre-existing conditions can feel like finding a loophole in the contract. Generally, two scenarios allow a pre-existing condition in your home to be covered by a home warranty:
Undetected flaw: If an appliance or household system failed due to a flaw that went unnoticed by a home inspector, it could be eligible for coverage under your home warranty. In such cases, the home inspector should not have been able to detect the flaw, especially if the appliance or system was structurally sound with no missing parts. A warranty provider will not offer coverage for a failure resulting from a flaw that should have been detected by the home inspector, even if it wasn’t. This emphasizes the inspector’s role in identifying potential issues.
Mechanical test: A basic mechanical test, such as turning an appliance or system off and on, should not result in smoke, unusual sounds, or any evident damage. If your home’s pre-existing condition meets these two criteria, your warranty provider is likely to extend coverage for it.
When a pre-existing condition won’t be covered by home warranties
When you enter into the process of buying a home, the smart thing to do is to hire a home inspector to give it a thorough inspection. This inspection lets you know if any repairs need to be done on the home, including the various systems required to operate the home and whatever appliances it might contain. At the end of the inspection, you’re left with a report containing all the known flaws in the house, which – if you’re in the process of buying the home – you can request that the seller address before closing the sale.
Whether the seller addresses the issues found during the inspection or not, those issues will still be recorded on the inspection report. When you purchase a home warranty, you’ll likely be asked to provide that inspection report so your warranty provider has it on file. While a home warranty will cover pre-existing conditions that go undetected by the home inspector, they won’t cover pre-existing conditions noted in the report.
Similarly, a home warranty won’t cover a failure that happened before the warranty was purchased, whether it was previously detected or not. For example, you couldn’t purchase a warranty after your HVAC system broke down and expect it to be covered. The failure has to originate before the warranty is purchased and occur after.
Pre-existing conditions that a home warranty typically won’t cover include:
Known pre-existing conditions: If a pre-existing condition is documented in the home inspection report or otherwise known to the homeowner or warranty provider before the warranty is purchased, it is unlikely to be covered.
Failures that occurred before warranty purchase: Any issues that originated before the home warranty was purchased and occur after the warranty effective date are generally not covered.
Preventable maintenance issues: Pre-existing conditions resulting from a lack of routine maintenance, such as neglecting to clean or service appliances or home systems, are usually excluded from coverage.
Non-mechanical components: Home warranties typically focus on covering mechanical components and systems, so pre-existing conditions related to non-mechanical features, such as cosmetic damage or structural issues, may not be covered.
Wear and tear: Normal wear and tear that occurs over time, leading to the deterioration of appliances or systems, is generally not covered under a home warranty.
Components beyond their useful life: Pre-existing conditions in appliances or systems that have surpassed their expected lifespan may not be covered.
Code violations and improper installations: Issues related to code violations or improper installations that predate the warranty are usually not covered. Home warranties typically assume that appliances and systems were correctly installed and met building codes at the time of installation.
Home warranty: Known vs. unknown pre-existing conditions
The distinction between known and unknown pre-existing conditions may seem obvious, but there are some specific points that make it worth discussing.
What is a known pre-existing condition?
Most of the time, after an inspection is completed, the home seller addresses any needed repairs before the sale closes. In the case of a known pre-existing condition, this condition was included in the home inspection report, but there was no effort made to correct the problem. The issue is on record as being present without any steps being taken to repair it.
For example, if a home inspector found that one of the toilets in the house had a leaky water supply line, the inspector would include it in their report. This makes it a known pre-existing condition whether or not the repairs are made. Thus, it will not be considered covered under your home warranty policy.
What is an unknown pre-existing condition?
A home inspection is primarily a visual assessment, meaning the inspector doesn’t disassemble or open up systems to identify potential issues with their inner workings. However, the inspector typically tests appliances and home systems to detect any apparent problems. In some cases, a problem that isn’t immediately obvious and doesn’t manifest during a standard inspection can be classified as an unknown pre-existing condition.
For example, the home inspector turns on the central A/C and finds no apparent issues during the inspection. However, a lack of regular maintenance has led to clogged ducts. This problem would have started before the home warranty coverage, went unnoticed during the home inspection, and is likely to be covered by the warranty provider once the A/C eventually breaks down.
Steps for homeowners to maximize home warranty benefits
A part of the home warranty equation involves homeowners taking proactive steps to ensure they get the most value from their home warranty. Here are some key actions you can take as a homeowner or potential buyer:
Choose carefully: Conduct thorough research on home warranty providers to find the best possible coverage. Be aware that while many providers offer coverage for pre-existing conditions, some do not. It’s in your best interest to focus on providers that offer such coverage to avoid potential surprises.
Research and read: Don’t waste your time entering into an agreement with a provider that lacks a demonstrated good reputation or doesn’t offer the coverage you require. Read customer reviews, compare warranty offerings from different companies, and ask questions if you can’t find the information you need.
Submit the inspection report: Once you have the home inspector’s report, send a copy to your home warranty provider. This way, documented known conditions are properly recorded, increasing the likelihood of coverage.
Request repairs: If you’re in the process of buying a home and haven’t completed the purchase, you may be able to negotiate with the seller to address known pre-existing conditions before closing the deal.
Prioritize proper maintenance: If you own an older home, ensure that your appliances and home systems are well-maintained and in good working order at least two months before your home warranty’s start date. So, does a home warranty cover old appliances? Yes, as long as it’s evident that you’ve been maintaining them properly. Regular maintenance and cleaning demonstrate your active care for your home’s appliances and components. Note that some home warranties may have a waiting period before they become effective.
Read the terms and conditions: Just like with any contract, it’s wise to carefully review all the terms and conditions of your home warranty. This helps you understand how it works and what to expect.
A home warranty provider won’t provide coverage for known pre-existing conditions, especially if they’ve gone unaddressed. Asking for coverage in that instance is like seeing that your car’s check engine light has been on for a few weeks and then trying to make a claim on your car insurance when the engine finally seizes. It’s up to you to do your part in this equation.
Things can get tricky when it comes to finding a home warranty that covers pre-existing conditions. While many providers offer this coverage, some will not. Still, with a little patience and research, you can find a reputable home warranty provider that offers coverage for unknown pre-existing conditions.
If you are a homeowner or are planning to buy a home, consider adding a home warranty to your to-do list. It’s a financial safety net that can shield you from unforeseen expenses related to your home’s systems and components.
