Home Warranty

Five Reasons Why You Need a Home Warranty

Joe Schwartz

Joe Schwartz

Home Warranty Editor

Whether you are a current or prospective homeowner, you have probably heard about home warranties. Home warranties may work a little like home insurance but the two are completely different. Home insurance covers damage to your home in case of a calamity while a home warranty covers repairs to home appliances.

white kitchen table

 

So what is a home warranty?

A home warranty is a plan that covers the cost of repairing certain home appliances and systems, in other words, it is a service contract between the homeowner and the company where the company is responsible for providing both the parts and labor.

Home warranties typically provide coverage for one year after which the homeowner can renew the contract for another year. In most countries, contractors are legally required to provide a warranty on the structural elements of the home.

 

How much does a home warranty typically cost?

The average cost of a home warranty can range in price from anywhere between $300 and $600 for basic coverage. However, some home warranty companies provide enhanced warranty plans for an extra 100-300 USD.

 

What does a basic home warranty plan entail?

In most cases, a home warranty only covers the mechanical items in a home. Non-mechanical items such as windows and doors may not be covered. In addition, home warranties do not cover repairs caused by negligence, improper maintenance or poor installation. A home warranty only covers damage caused by everyday wear and tear.

 

Most home warranty plans cover the following;

  • Water heater
  • Telephone wiring
  • Range and oven
  • Inside plumbing stoppages
  • Garbage disposals
  • Furnace/heating
  • Electrical systems
  • Duct work to code
  • Doorbells
  • Dishwashers
  • Ceiling fans
  • Air conditioning

 

For an extra cost, some companies may provide additional coverage of the following:

  • Washer
  • Dryer
  • Garage doors
  • Pools and septic systems

What is not covered?

  • Spa or pools unless specific coverage is requested
  • Refrigerators, washers and dryers, or garage door openers
  • Permit fees
  • Outdoor items such as sprinklers
  • Items that were broken prior to closing
  • Faucet repairs, although this can vary
  • Exclusions noted in the policy

 

Reasons why you should consider buying a home warranty:

 

1. A fairly inexpensive way to foot the repair bills

Let’s face it; a new home does not come cheap. You may have got a pretty good bargain on your home but the bottom line is that you spent money- a lot of it! Besides, buying a home is just the beginning. Maintaining a home requires a lot of work and money too.

Whether you are the careful or reckless kind, your home will always be in need of a couple of repairs here and there and these may be pricey. You never get a warning before something breaks down. One minute it is working and the next minute it is not.

So, what happens when your fridge or washing machine breaks down? What happens when more than one appliance break down at the same time? The last thing you want is to dig into your savings.

A home warranty ensures that the solution to such problems is only a call away. All you have to do is call your warranty company and they will take care of it at no extra cost to you. Of course, this depends on your warranty contract.

2. Save your time and energy

Even if you can comfortably pay for repairs, the process of getting things fixed around the house can be exhausting. Sometimes it may take a while before you figure out exactly where the problem is. You then have to find a suitable repairman to fix whatever has broken down. This means shopping around and comparing prices. You may not know who to trust with your appliances in terms of expertise.

A home warranty takes this burden from your shoulders and places it on the warranty company. Home warranty companies work with licensed technicians and contractors to ensure your repairs are done in the shortest time possible.

3. Complement your home insurance policy

While a home warranty cannot substitute a home insurance, it does offer additional coverage. This is because a home warranty covers home appliances and systems from damage due to normal wear and tear unlike a home insurance.

Even if you already have a home insurance plan, you cannot prevent your home system component systems from breaking down. Therefore a home warranty, especially when purchased together with a home insurance policy, gives your home comprehensive coverage.

 

4. Limited wait times

Most companies have a waiting period of 15-30 days while others have no waiting period at all. In addition, you do not require a home inspection to get a home warranty. This means that you can get home warranty services within a short time after signing up.

5. Predict future expenses

With a home warranty you do not have to keep guessing the costs of repairs. It gives you a rough idea of future expenses. This makes it easy for you to budget for household expenses. For instance, you may get a warranty company that allows you to pay for your plan in monthly installments if the annual payment plan does not work for you. In such a scenario you know exactly how much you are supposed to pay every month. On the flipside, if something breaks down and you do not have a home warranty, you do not know what to expect when the repairer sends a quotation.

A little secret…

Having a home warranty makes your home more appealing to buyers if you ever decide to sell. Prospective buyers will be pleased to know that they do not have to spend money on repairs for the next year or couple of months (depending on your plan).

 

Is a home warranty right for you?

Despite the many benefits of having a home warranty, a home warranty is only as good as its coverage. Before you pay for a home warranty, compare the age and lifespan of the appliances or systems covered by the warranty. You can easily get this information from the National Association of Certified Home Inspectors website.

It makes more sense to cover the more expensive components as these will be costly to replace. Next, check for pre-existing issues. You do not want to call the warranty company only to find out that they will not fix your refrigerator, do you? Finally, it is important to verify that your warranty company is duly registered and licensed.

Home warranties provide a fairly inexpensive way of repairing home appliances and systems so you really must purchase one for your home. Nonetheless, go over the contract carefully before settling for a particular company. You may sign a contract that will hit you with unpleasant surprises much later.

What to look out for:

First, you want to know beforehand if your warranty company does not cover appliances that were not installed properly. Some contracts only cover a certain amount of wear and tear; it is better to know this well in advance. Other warranty plans only repair; they do not replace.

Some warranty plans cover the full cost of repairs while others may cover only a fraction of the costs. This is not something you will enjoy discovering after parting with 500 dollars, is it? Also, your plan may cover one item but not the other- find out!

Finally, you must find out who will do the repairs. You should also inquire about cancelling the plan in case you decide to. Some companies offer free trials for their warranty plans- just ask.

A home warranty is an excellent way to protect you from the additional expenses that come with owning a home. In order to get value for your money, ensure you do a lot of research before signing a contract. After purchasing a home warranty, ensure you maintain your home appliances and systems and appliances properly. The last thing you want to have to do is cough out hundreds of dollars because your warranty company rejected your claim.

Top 5

1
Choice Home Warranty
Choice Home Warranty covers all household essentials offering flexible packages and 24/7 customer support.
2
Select Home Warranty
Select Home Warranty’s Platinum Care plan makes a great choice for homeowners who need a large number of appliances covered.
3
First American
First American Home Warranty provides flexible coverage for homeowners insuring repairs on home systems and appliances with optional add-ons.
4
AFC Home Club
Home owners looking for flexible home repair plans can customize packages with AFC Home Warranty.
5
Total Home Protection
Total Home Warranty offers flexible coverage of home appliances and services with optional add-ons and 24/7 claims service.

Must Read