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What a Home Warranty Can Do for You

by Nathan Zachary
Home Warranty

If you are buying a home or have just bought one, you may be thinking about how to defray costs if anything breaks down or is damaged. After all, your home is probably your most significant investment, so it’s crucial to maintain it. Failure to make repairs can lower home values. With that in mind, many owners buy a warranty to cover unexpected home repairs.

Home Warranties Are Not Home Insurance

Home insurance covers significant perils like fire, hail, property crimes, and certain types of water damage that might impact the structure or homeowner’s possessions. Insurance does not cover breakdowns caused by age and usage. In contrast, a home warranty will cover repairs on covered home systems.

How Home Warranties Work

According to Bob Vila, home warranties are contracts between homeowners and a warranty company. Policies provide discounted repair and replacement services for major home components, like HVAC, furnace, plumbing, and electrical systems. Depending on the policy, it could also cover major appliances, like refrigerators, washers, dryers, and even swimming pools. Owning both a comprehensive warranty and home insurance policy offers significant financial protection.

What Do Home Warranties Cost?

Providers offer home warranties in various price ranges based on coverage. Per Bankrate, contracts can range from $220 to $1,841 annually. They are paid upfront unless the company offers an installment plan. Costs also vary according to the type of home- condo, single-family detached, duplex, or townhouse.

Prices are also based on whether homeowners want basic or extended coverage. Coverage is typically higher for a new home; otherwise, the home’s age does not impact the cost. You pay a service fee anytime you need a repair and schedule an appointment with a service provider. Buying a warranty does not mean you will never pay for repairs. Policies may not cover repairs if systems are not maintained, and a policy may not cover the repair you need.

When Are Home Warranties a Good Idea?

Warranties are suitable for buyers who have invested all their cash into a home and have no reserve funds. Policies can protect owners from facing huge expenses right after moving in. It can also make financial sense when buying an older home. There’s no telling when aging systems may break down.
Sellers with older homes may buy home warranties and use them as a selling point. Buyers are automatically protected for some time. It’s always a good idea for house hunters to ask for a warranty if appliances or systems are very old and nearing the end of life.

The Benefits of Home Warranties

Home warranties can make financial planning simpler. It is easier for homeowners to create and maintain a budget without worries about big, expensive repairs. The policies also benefit those who cannot or do not want to do home repairs. Busy people are freed from the job of finding contractors and getting estimates. Home warranties also make a lot of sense if homeowners have expensive appliances.

A home is a big investment, but the purchase price is only the beginning. It’s essential to keep up with repairs since lack of maintenance lowers property values. Home warranties can reduce the cost of home repairs and ensure they are taken care of quickly by experts.

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