If you are buying a previously owned home and a home warranty is part of the deal there are some important facts you should know before you buy.

If you purchase a warranty on an existing home, you are really buying a service plan that is supposed to protect you from repair bills on major appliances. This type of warranty does not cover structural defects, so don’t even be tempted to skip the home inspection.

One of the major problems with this type of warranty is the denial of claims because the problem was a preexisting condition. The air conditioner stopped working and the owner called the warranty company. The claim was denied because the company said the problem predated the contract.

At Call For Action, we find that denials of claims for preexisting conditions are quite common. In the case of the air conditioner, however, the unit was not examined when the contract was issued, so how could a claim be denied? And how could a company issue a contract without inspecting all the appliances?