
As a homeowner, you just never know when you’ll face unexpected and costly repairs for your home. Actually, you’ll probably face it at THEEE most inconvenient time! Like the time my dishwasher broke right before my daughters grad party where we had 100+ people over…but I digressed. A home warranty can sound like a great solution to this dilemma, but is it really worth it?🤔
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 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.
What is a home warranty?
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. Sears used to offer one. Does Sears even exist anymore???🤔
Anyway, 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. Home insurance, covers unforeseen damage and catastrophes, whereas a warranty fixes things that break earlier than they should have.
What are the typical home systems covered and yearly cost?
Policies typically include hvac systems, water heater, 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 system.
One year of coverage typically costs $400-500 with a $100 deductible when you make a service call.
Who can purchase a home warranty?
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.
What do consumers need to know before they buy?
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:
- Covers repairs on large systems (heating or air conditioning) but does not always cover replacements. Typically, it will help your keep appliances functioning and in working order.
- Won’t cover if breakage is due to poor maintenance by the homeowner; typically covers “normal wear and tear” of an item.
- Excludes certain items – i.e., may cover refrigerator repairs but not the ice maker.
- Doesn’t cover items once they reach a certain time period or beyond its serviceable life (i.e., 20+ years old).
- Doesn’t cover pre-existing conditions. Items need to be properly installed, maintained, and in good working condition when you apply for coverage.
- Doesn’t typically cover roofs and exterior items.
What happens when I need to have something repaired?
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.
Some warranty companies allow you to use your own contractor whereas others may require you to use their subcontractors. You just have to do your research.
What if something is not covered when I thought it was?
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!
And sometimes it’s all about how your contractor words the repair note – *got that little tip from a contractor that’s familiar with the whole warranty process – your welcome😉
What do I look for in a home warranty company?
It’s important to find a reputable company that has been highly recommended by others.
- Investigate its long-term history and Better Business Bureau information.
- Compare coverage levels and upgrades to standard packages along with deductibles and service fees.
- Read the fine print in the contract to understand any co-pays and exclusions.
- Understand how you can cancel a contract.
Let me know if you have any questions about getting a home warranty whether you’re a current homeowner or new homebuyer. Simply email me here.
Hi, there!
I'm Kyndra and I love helping people buy and sell no matter what stage of life they are in. From first timers to downsizers and all the chapters in between. Let me know how I can help you make your real estate dreams come true.
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