Someone will bring up the importance of a home warranty policy if you’ve recently bought a house or are looking for a new one. But if you’re on the fence about getting one, you should probably find out what they cover. We’re here to guide you as you make these important decisions.
You might think of a home warranty as insurance for your house. Don’t mix this with homeowners insurance, which pays for everything in your home if something happens to it (think fire, flood, and the like).
Coverage for broken or faulty home appliances is provided through house warranties. If something breaks in your house, the home warranty company you signed up with will either come out and help you fix it, pay to have it fixed, or replace it entirely.
Most house warranties protect against costly repairs for things like the electrical system, central heating and air conditioning, and key appliances like the refrigerator, dishwasher, and washing machine.
There may be supplemental insurance plans available to you, although this may vary by firm. The cost of your premiums may go up if you decide to get what is known as a “extended warranty.”
What is the price of a home warranty?
Costing hundreds of dollars a year, home warranties are typically due in one lump sum. A new homeowner may qualify for a payment plan from some businesses.
The price of a house warranty can be affected by a number of variables, such as:
In-house business operations
Placement and housing type (e.g., single-family, condominium, townhome)
Coverage Amount Optional (basic vs. extended)
Condition of the property in terms of its age (newer homes tend to cost more)
need for covering of accessory buildings (often not included in basic designs)
The cost of a home warranty plan is not related to variables such as the square footage of the dwelling.
There is a cost for a home warranty inspection that customers must pay after submitting a claim, in addition to the premiums. The cost of having an inspector visit your property can run you anything from $60 to $100.
No matter what the outcome of the inspection is or whether or not the home warranty provider decides to correct the problem or pay for the repairs, the inspection charge is still due.
The Top Choices for Home Warranties
Several companies offer house warranty services. One may choose among them because each offers something unique. Among the most well-known in the United States are:
American Home Shield is the Best Option in General
Home Warranty by Choice offers the best basic plan.
Select a Home Warranty for the Best Price!
Liberty Home Guard Is the Quickest to Respond
The Most Versatile for Personalization Is the AFC Home Club
First American Home Warranty Offers the Best Appliance Protection Plan.
Cinch Home Services is the Best Extra!
The availability of certain companies may vary depending on your location. Discuss the topic with your real estate agent to learn about local preferences and hear from current residents about what they like best.
Criteria to Evaluate Service Providers for Home Warranties
Before buying a house warranty, it’s important to consider the following points.
A lot of people have questions about what is really covered by the house warranty. Discover what kinds of issues are covered by the plan.
Premiums for what amount?
In what ways does the policy fall short, and what does it specifically exclude?
How much do emergency repairs cost? How much of a wait time can one expect before receiving a house call?
Typically, they collaborate with what local contractors?
The Benefits of a Home Warranty Program
Buying a house warranty provides a few benefits.
For the first year after moving into a new house, when you’re still getting used to the layout, the layout of your new appliances, and your new environment, having a plan in place to cover the cost of addressing the most typical problems can be a great relief.
A home warranty policy can be a convenient way to get repairs done fast if you aren’t skilled with tools and DIY projects. In addition, having this sort of protection might lessen the overall price of repairs.
It is common practise for a seller to provide a guarantee to the buyer of their home that is valid for a period of one year. It may give you peace of mind and help you prepare for the future so you can avoid any major expenses that may come up.
The Downsides of a Home Warranty
While the thought of having a safety net for your new home purchase is appealing, there are some drawbacks to purchasing a house warranty.
The first is that the scope of most warranties is extremely limited. In addition to the premium, you’ll have to pay out of pocket for someone else to fix the issue if the warranty doesn’t cover the problem or the whole cost. Even if the problem is covered by the home warranty, you still have to pay for an inspection if you want to have a professional come to your house to check it out.
For new homeowners who are counting on the safety net, this ambiguity can cause a lot of stress and emotional distress.
If the service you require is covered by the warranty, the company will arrange for a local contractor to provide it. In theory, that’s fantastic, but as the client, you get zero input on which service provider gets the job done. We are all aware that not every contractor is the same. In this situation, you’re stuck with whatever solution the warranty provider offers.
Likewise, you might be problem-free for a long time after settling into your new house. Your premium payment is wasted in that instance. This sum would be better served by being saved in a high-interest savings account or invested in the stock market.
Before acquiring a house warranty, it’s important to factor in this opportunity cost.
In Conclusion: Home Service Contracts
Not all homeowners need or would benefit from a home warranty. It’s a personal choice that should be based on factors like the price range and type of house you’re looking to buy.
You can ask the seller of a house you’re considering to foot the bill for a one-year warranty if you’re still on the fence about making a purchase. You will have the freedom to select the home warranty provider of your choice. This way, you won’t have to pay for it out of pocket, you’ll have some financial security in case something goes wrong with the house, and you can opt out after a year if you decide you don’t need it.
There is no “wrong” decision when it comes to house warranties. After making such a sizable investment, it’s crucial for a new homeowner to stick to their financial plan and make prudent purchases. As with any other life-altering choice, you and your loved ones need to get all the facts before making this one.