Will a residential service contract (sometimes referred to as a home warranty) cover known pre-existing conditions?
No. A residential service contract must not be used to market properties with components or systems that do not work or are clearly near the end of their mechanical life. Every approved residential service contract offered in Texas excludes known pre-existing problems, and purchasers who try to get known pre-existing problems corrected will always end up dissatisfied. Any repairs needed prior to closing should be negotiated with the seller and corrected or repaired prior to the effective date of the home warranty contract. While known pre-existing conditions will not be covered by a home warranty, some home warranties will cover unknown pre-existing conditions under certain limited circumstances. Carefully review the limitations and exclusions of the home warranty to determine if, and under what circumstances, unknown pre-existing conditions will be covered.