Home warranties can minimize the out-of-pocket expense of fixing or replacing appliances and systems. They also offer convenience through a streamlined claims process and single access point to service providers.
A home warranty can cost a few hundred to several thousand dollars per year, depending on the coverage offered. Choose a company with clear contracts that detail all costs, terms and conditions.
Coverage for Appliances
For many homeowners, a home warranty provides financial protection against costly repairs and replacements of appliances and systems. It also provides convenience with a streamlined claims process and access to professional service providers.
While a home warranty typically costs an annual premium and service fee, it can save you money in the long run when major appliances or mechanical systems need repair.
As a first-time buyer, you can gain peace of mind by asking sellers whether their appliances and systems are covered under any manufacturer warranties or a home warranty. In addition, you should get a copy of the home warranty contract so you can determine what is and isn’t included in the plan. You should also evaluate the monthly cost of an appliance and system warranty compared to the potential savings if it breaks down. This will help you decide if it makes sense to purchase a home warranty.
Coverage for Systems
Systems like your heating, cooling and plumbing are essential to keeping your home comfortable. A home warranty covers the repair or replacement of these systems if they fail from normal wear and tear.
These items tend to be out of sight and out of mind for most homeowners until they break down. The monthly or yearly cost of a home warranty is a small price to pay to ensure that you don’t have to worry about these large unexpected expenses.
A home warranty is a great addition to your purchase contract when buying an older home with appliances and systems that are out of their original warranties or may not have any at all. Include one in your purchase contract to avoid costly breakdowns and repairs after you move in. It’s also a good way to help sell your home, as it provides buyers with peace of mind and can be used as leverage in the negotiating process.
Coverage for Major Appliances
A home warranty gives you complete home protection with what is covered in your plan. This is in case major appliances or systems break down due to normal use and wear. Typically, the warranty company will
schedule a repair technician to assess and fix the problem. If a covered appliance needs to be replaced, the warranty company will usually provide you with a comparable model but you may not have a choice in which brand or type of product is provided.
Most home warranty plans include the refrigerator, stove, dishwasher and washer and dryer. Some plans also cover a garage door opener, garbage disposal and water heater. Some plans will even cover electronics like televisions and computers.
However, the amount of money saved by a home warranty will vary by plan and company. Some plans will charge high premiums and service fees that exceed potential savings, so it’s important to shop around and compare offers. Be sure to read contract fine print, especially regarding which items are excluded.
Coverage for Minor Appliances
Generally, home warranties don’t cover surface or cosmetic damage to appliances and systems. This includes dings on the dishwasher door or scratches on the refrigerator. If you want to make sure this is covered, consider a plan that has an upgrade to include coverage for these issues.
If you are considering a home warranty, carefully evaluate the costs and benefits. The yearly premium can range from a few hundred dollars to over $1,000, depending on the amount of coverage you select. Also, there are often copays and service call fees that you need to be aware of.
Home warranties can help you save money on unforeseen repair bills and provide peace of mind.If your appliances and systems are relatively new, they likely have manufacturer warranties that cover repairs or replacements.