chicago-condos Administrator on 28 Dec 2006 04:50 pm

Buyers Beware: Warranty May Not Cover All Repairs

Virtually every home or condo seller agrees to provide a home warranty if the buyer requests it—and realtors tell every buyer to ask for one. But buyers need to pay attention to what those assurances cover.

Art Chartrand, general counsel for the National Home Service Contract Association, says that in many cases “consumers don’t read their contracts.”

For instance, warranties offered on new construction differ from those on existing homes and condos. Existing-home warranties are actually “service” contracts, says Chartrand, and they only cover repairs on specified equipment. They also may not guarantee replacement on items that can’t be fixed. And most often the home or condo owner has to contact the warranty firm first before contacting a repair service.

Most warranties cost between $300 and $500, and can run higher depending on how comprehensive their coverage is. “Most standard contracts will cover only built-in appliances, but you can get extra coverage for things like free-standing refrigerators,” says Chartrand.

Companies that are licensed in Illinois to offer warranties have to prove every year that they can afford to pay consumer claims. When a claim is filed, the warranty firm is obligated to provide service within 60 days.

If a consumer has a complaint about a warranty company, it is mediated by the Illinois Department of Financial and Professional Regulation. The department has received about 100 complaints within the last five years. Home or condo owners don’t always win claim disputes, however, according to Michael McRaith, the department’s insurance division director. Sometimes a warranty firm won’t cover a repair because it determines that the damage was present before the homeowner moved in.

“A good repairman can tell if it was cracked or broken [for a long time],” says Chartrand.

Home and condo buyers are encouraged to obtain a complete inspection before making a purchase, including a separate detailed inspection of heating and air-conditioning equipment.
Chicago real estate, Chicago homes, Chicago condos, condo buyers, warranties

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