Owning a home is a great experience and provides many people the freedom they need to live comfortably and in peace. However, it can cost a lot to keep a home and all its appliances running properly to ensure safety and comfort for the whole family. Unfortunately, when appliances or systems break down, it can sometimes break the bank keeping the home going. This is where a home warranty can help.
What is a Home Warranty?
A home warranty is basically a service contract. It provides coverage for repairs and replacement of covered appliances and systems due to normal wear and tear. For those interested in home warranties, a home warranty provider can answer any questions about the extent of the coverage and help create a custom plan for their home.
How Does it Differ from Homeowner’s Insurance?
Homeowner’s insurance provides protection for the home when an unexpected event occurs. This could be a fire, storm, or other major events that cause damage to the home or its contents. Homeowner’s insurance can even provide coverage for vandalism and theft.
Homeowner’s insurance will even cover liability costs for the homeowner. This means that if someone falls on the property or otherwise injures themselves, the insurance will cover medical expenses. It can even cover damages to other’s properties where the homeowner would be responsible, such as a tree falling. It can even cover the legal fees of such unexpected situations.
A home warranty, however, provides coverage for expected events. No matter how well an appliance or home system is cared for, eventually, it will break down. This is where a home warranty provides coverage. When the system or appliance is in need of repairs or even replacement, homeowners are covered.
What Do a Home Warranties Cover?
A typical home warranty provides coverage for standard kitchen appliances, basic home systems, or both. Homeowners can also add coverage for additional appliances and systems as their home needs. There are even options available to cover various structural aspects of a home.
Kitchen Coverage: When choosing just the kitchen coverage, homeowners can expect all their basic kitchen appliances to be covered by their contract. These basic appliances include the refrigerator, oven, dishwasher, and built-in microwave. These are the basic appliances that most homes in the U.S. have. However, if there are other appliances in the kitchen, they can be added to the contract.
Home Systems Coverage: When choosing the home systems coverage, many of the main systems that power the home are covered. This includes the furnace and air conditioner. It also includes the home’s plumbing and the water heater. It even covers repairs and replacement options for the electrical panel and the basic wiring in the home.
Additional Coverages: Although the basic kitchen and systems coverage offers a plan to meet the needs of most homeowners, not every home is created the same. Some homes have additional appliances, such as deep freezers, washers, and dryers, or even wine coolers. Additional coverage can be added to ensure these appliances are protected.
Even the systems of a home can be different in various houses. Some homes have well pumps, septic systems, or even water softener systems for their homes. They can choose to add this coverage to their contract to ensure any needed repairs are covered.
Even those that have pools and spas at their home can get the peace of mind that comes with a home warranty. There are options that can provide coverage for the equipment that keeps these items running. There are even options to provide additional coverage for plumbing and roof leaks.
How Does a Home Warranty Work?
Homeowners can purchase the service contract for their specific covered appliances or systems. This contract lasts one year and can be renewed annually. The pricing of these contracts starts as low as $40 per month.
When a covered item is experiencing issues, the homeowner can simply call the company or submit a claim online to begin the claims process. A service contractor will then be contacted, and the homeowner will be informed of the appointment.
When the service contractor arrives, homeowners simply pay their agreed-upon service fee. The service fee is like a deductible for service. The contractor will then determine if repairs or replacements are necessary. Once the determination is made, the repairs or replacement will be performed as soon as possible.
Considering the potential costs of repairs and the extreme costs replacing an appliance or system can cost, the price of the contract and the service fee are far less than homeowners would pay without such an agreement. Depending on the problem, homeowners can save hundreds or even thousands of dollars on their home repairs.
What Are the Downsides to a Home Warranty?
There are a few downsides to a home warranty that many people have had concerns with. One complaint is the potential for long wait times for repairs. It seems that some users who attempt to make their claim by phone can have longer wait times. However, setting up an online account can often eliminate much of the delay.
Some individuals feel as though they have little control over the decisions with the home warranty service. The home warranty company will use contractors they have agreements with. It is also up to the contractor whether a covered item needs to be repaired or replaced.
It is also important for home warranty customers to fully understand their service contracts. This service contract is only for issues that occur due to normal wear and tear. If proper maintenance has not been performed, the issue may not be covered. In addition, the service does not cover unexpected events, such as fires, floods, animal infestations, or other issues that may affect the covered item outside of regular usage.
How Does a Home Warranty Benefit Home Buyers?
A home warranty can benefit home buyers in many ways. For many first-time home buyers, home repairs can be a bit intimidating. With a home warranty, they have a helping hand ready and waiting to fix the problem. This can also be beneficial for those new to the area and do not know the local service shops.
The biggest benefit to home buyers is the potential savings. The first year after buying a home, many homeowners have an extremely tight budget after all the costs of getting into the home. A breakdown of a major appliance or home system could be devastating to their budget or even impossible to manage. With a home warranty, all that is required is the small fee for the service call and the repairs or replacements are covered.
How Does a Home Warranty Benefit Home Sellers?
When selling a home, it can be hard getting interested people to actually buy the home. By offering a home warranty, it can entice some people to make that leap to buy. This added bit of protection gives a potential buyer more peace of mind about the condition of the home.
A home warranty is not just for the individuals selling their home, real estate professionals can also benefit from home warranties. By providing this option for their customers, they can add value to the homes they are selling and build confidence in their services.
How Does a Home Warranty Benefit Home Builders?
Homebuilders can benefit from a home warranty as well. When building a home, a simple problem with the finished product can eat away at any profits made from the job. Major problems with the home could be potentially devastating for the business. A home warranty for builders can save some of that worry.
By law, home builders are responsible for the cost of repairing any structural defects in a home. A home warranty can provide coverage for these things and help ease the burden. In addition, a home warranty can provide additional validation of the workmanship quality that will build confidence with customers.
Can Current Homeowners Purchase a Home Warranty?
Although home warranties are strongly recommended when purchasing a home, a sale is not necessary to get this beneficial coverage. Homeowners can purchase a warranty at any time. There is, however, a waiting period for those not purchasing the warranty during a sale.
The waiting period can vary due to a variety of reasons. Each home warranty company has its own set of terms for its service plans. However, the waiting period is typically 30 days. This means that a service call will not be covered until 30 days after the start of the contract.
Being a homeowner is a great responsibility that comes with a lot of risks. Homeowners can minimize many of those risks by having proper coverage from a homeowner’s insurance policy and getting a comprehensive home warranty plan. This will help protect the home in almost any situation.
Whether buying, selling, building, or just enjoying a home, it is a good idea to consider the benefits of a home warranty. It can offer great savings and peace of mind when a problem arises with one of the many home appliances and systems.