Definition
Third-party warranties supplement builder and manufacturer coverage, typically covering systems and appliances beyond original warranty periods. Coverage terms, limits, and exclusions vary significantly.
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Third-party warranties supplement builder and manufacturer coverage. Products like home warranties (American Home Shield, Old Republic) provide coverage for systems and appliances beyond builder warranty periods. Third-party warranties typically require annual premiums and have deductibles. Coverage terms, limits, and exclusions vary significantly between providers. Third-party warranties provide comfort but should be carefully evaluated for value.
Pro Tip
Evaluate third-party warranties carefully. High deductibles and exclusions may limit value.
Example
A homebuyer purchases a 5-year home warranty providing coverage for HVAC, plumbing, and appliances beyond the builder's 1-year warranty.