As a homeowner, you just never know if/when you’ll face unexpected (and costly) repairs for your home.
One way to mitigate the anxiety of being a homeowner and having to be responsible for things that break before they should is to get a home warranty.
Home warranties have gotten a bad rap in the past, but like any warranty or insurance policy, the upfront cost could be worth it in the end.
But, you do need to read the fine print and understand any of the terms and conditions!
Read on to learn more about the pros and cons of home warranties and whether it’s something that will fit your particular needs and budget.
It’s a policy where your home’s main systems or appliances will be covered for repair work. It’s usually purchased through a home warranty company.
A home warranty is different from your homeowner’s insurance or a manufacturer’s warranty on a product. For example: It will cover the labor to fix a failed part on a product that your manufacturer’s warranty doesn’t.
It will pay for the plumber to fix a broken pipe but not the damage to your home, which your insurance policy should cover.
Therefore, it can work hand-in-hand with other home policies when something goes wrong.
It’s important to keep in mind that a home warranty is different than home insurance. It’s similar in how car insurance and a car warranty cover different items. Home insurance, like car insurance, covers unforeseen damage and catastrophes, whereas a warranty fixes things that brake earlier than they should have.
Policies typically include air conditioning heating systems, water heater, furnace, plumbing, any built-in appliances such as refrigerator or dish washer, and for an additional fee, you can add “extras” such as a swimming pool systems.
One year of coverage typically costs $400-500 with a $100 deductible when you make a service call.
Some warranty companies will allow a homeowner that has been in their home for a long time to buy a warranty. This is a great improvement since previously home warranties could only be purchased by new homebuyers at the time of settlement.
It’s very important to read over the fine print of your contract and understand what is covered and what is excluded. Here are some typical actions to be aware of for standard packages:
A home warranty company requires you to contact them first when something breaks. They will then contact their service providers to send to your home. They will pay the service provider once the claim is approved.
If you call a service provider without contacting them first, the company may not cover the repair.
You do not control who can come to your home to repair an appliance or major system. That can be a major downside to some homeowners, especially if they have to wait a long time for a repair.
If your furnace breaks down during a cold spell, you have to wait for the home warranty company to deal with their subcontractor.
Like any warranty for any other type of purchase, there are times the warranty company can choose not to cover something. That’s why you need to read the fine print carefully!
It’s important to find a reputable company that has been highly recommended by others.
Of course, nothing is foolproof. I can’t guarantee that having a home warranty will be a breeze to manager or that they will cover anything and everything that might happen in your home, but my clients who have them and have had to make claims are happy with the outcome. There are other clients who paid for a few years and cancelled because they never needed to use it. As a homeowner, you get to make these important decisions, but I’m here to help.
If you’d like to discuss whether you should get one and which company to go with, I can make some recommendations. It depends on several factors and some warranty companies are better than others, so I’d love to chat with you to help you decide. Simply email me here.
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