People often buy a condo warranty when purchasing a condominium, as warranties can be the perfect solution for people who don’t want to worry about potentially replacing appliances and other systems in the condo in the future. Before opting for this type of agreement, you should understand the finer details of the coverage, the benefits, how the process works, and other considerations.
How It Works
Condominium warranties cover appliances and some indoor systems. This is a separate coverage from condo insurance or any coverage provided by the condominium association. Insurance predominately covers against perils affecting the structure of the unit and your personal property. Essentially, a condo warranty is a legal contract or guarantee between a home warranty company and the owner of the residence.
The company charges a monthly or sometimes yearly payment. This covers the replacement cost of covered appliances or features like refrigerators, stoves, indoor plumbing, toilets, heating systems, washers, and dryers. Most companies offer a basic contract, but you can usually change some provisions or add on special appliances that require coverage.
When an appliance breaks, you simply contact the warranty company, and they send out an approved service provider. In some instances, you’re allowed to choose the service provider, depending upon the terms of the agreement. The service provider comes out to look at the system or appliance to determine whether it is no longer working. If it is truly broken, the appliance will be replaced according to the terms of the contract.
Contracts may vary in price depending on whether you buy a basic plan or an extended plan. Most plans range from $300-$500 per year, and they typically do not increase far beyond these amounts unless the unit is unusually large. You are responsible for paying the monthly or annual premium and the costs of service fees.
If you are considering the purchase of an older property and the appliances are already a few years old, you’ll have the peace of mind that they are covered and will be replaced if necessary. In other words, you probably won’t be handing over several hundred dollars every time an appliance stops working.
A warranty contract can also benefit the seller of a residence in addition to buyers. In some sales, the seller can offer to pay for a warranty, and this often seals the deal for the buyer. The agreement reduces the risk of potential problems in the future and makes the buyer more comfortable purchasing the unit.
Always read legal papers carefully to see what is included or excluded. Some companies have clauses about only replacing products that have been cared for according to their maintenance requirements. If for some reason the item is not covered, you are still responsible for the service call charges. Depending upon arrangements, some companies do not guarantee that they will replace the item with the same brand or model. However, the replacement is usually similar.
You should decide if a condo warranty would be beneficial based on your needs and the ages of your appliances. This kind of agreement frequently presents an advantage, but it is always a good idea to carefully consider entering into any contract.