Home warranty what is it? Home warranties can be worth the money for homeowners, but it’s important to understand their pros and cons before you sign up. This guide will cover some of the most important things to consider when deciding whether or not a home warranty is right for you.
Home warranties are service contracts that typically cover repair and replacement costs for appliances and systems. They are often offered by sellers as an incentive to entice buyers.
1. They give you peace of mind
Home warranties are a great way to give yourself peace of mind. They are designed to protect you from the unexpected expenses that can arise as a homeowner. For first-time homeowners, this can be a huge relief.
Unexpected repairs can deplete your emergency fund and strain your budget. A home warranty can help you avoid these expenses by allowing you to spread them out over time through the service fee.
A home warranty can also save you time by providing a single point of contact for all repair services. However, you should be aware that local service providers will likely contract with the warranty company to provide the repairs. This can be a drawback for those who prefer to use their favorite repairman. It can also limit you to a limited number of options when your appliances or systems break down.
2. They save you money
Home warranties are a popular choice for homeowners who want to save money on repair and replacement costs. These contracts provide discounted service to home systems and appliances that often don’t get covered by homeowners insurance, which only covers damage caused by a specific peril like fire or theft.
Home warranties can also help if you’re a first-time buyer and don’t know the reputation of local repair technicians, or if you’re selling your home and want to entice potential buyers with a warranty. However, before you buy a plan, make sure you understand what is and isn’t included in your policy. Also, be prepared to pay a fee each time you file a claim, or the repair or replacement is denied. This could add up to a lot of money in the long run.
3. They save you time
Purchasing a home warranty can save homeowners time and hassle because it will be easier to find service providers that are available to perform repairs or replacements. This is especially true for first-time home buyers who may not know reliable contractors in the area or for older homes whose appliances and systems have expired manufacturer warranties.
It’s also important to remember that a home warranty is not insurance, but rather a service contract that offers financial protection in case certain appliances or systems fail due to normal wear and tear. As such, it’s a good idea to look at each plan carefully and determine whether it’s right for your specific needs. Then you can decide if paying an annual premium and a day-of-service service fee is worth the peace of mind.
4. They give you unlimited service calls
The home warranty is often a selling point for a property, or an option buyers can buy on their own to save themselves from the hassle of finding and paying a repairman when something breaks. But it is important to remember that a home warranty is not insurance, and it only covers what’s listed in the service contract.
The homeowner pays a monthly or annual premium and when their system or appliance breaks down, they file a claim with the company. The company then assigns a vetted contractor to assess the problem and carry out any necessary repairs. In return, the homeowners pay a predetermined service fee that is usually less than the cost of hiring someone on their own. These fees can vary greatly from provider to provider, so it’s essential that homeowners gather quotes before purchasing.
5. They give you peace of mind
A home warranty can save you from stressing over big costs. For a small annual fee, you can protect yourself from having to dip into your emergency savings to pay for things like a broken dishwasher or air conditioning system.
A warranty company will connect you with a contractor, cover repair and replacement costs, and manage everything else for you. This takes away the anxiety of having to collect quotes and tinker with repairs on your own.
Whether you’re a new homeowner who doesn’t want to deplete their emergency savings or an older homeowner who wants the convenience of one call if something breaks, a home warranty can give you peace of mind for just a few hundred dollars a year. And that’s priceless.