Wondering if a home warranty can save you money? Whether you are buying a new or an old home, chances are high that you are offered a home warranty by the seller. Different warranty companies can offer you a home warranty after the sale. This warranty acts as a safety net against unforeseen and expensive repairs to your home that may arise after the sale closes. Ideally, a home warranty is a good type of financial protection, but is it worth it? Read on to learn if a home warranty can save you money.
What Is A Home Warranty?
You should know that a home warranty is different from home insurance, which is designed to cover major damages to the property often caused by fires, property crimes, or hail. These factors can affect the entire property or the personal possessions of the homeowner. A home warranty involves a contract between the homeowner and the home warranty company. The company offers discounted replacement and repair services on the components and appliances in the home that include electrical systems, HVAC, plumbing, furnace, refrigerators, dryers, and pools among others. Homeowners insurance usually does not cover these items.
Who Needs A Home Warranty?
You need to consider getting a home warranty when you buy a previously owned home. The seller can offer you the warranty as part of the deal to incentivize you to buy the home. Alternatively, upon close of the sale, different home warranty companies can approach you with an offer. When you occupy a pre-owned house, you may never know the lifespan of the appliances and systems. Therefore, a home warranty can offer you protection in case of any component malfunctions when you are still new to the place. It is important to understand the terms and conditions of the warranty.
When you are building a new home with new systems and appliances, it might not be necessary to obtain a home warranty. The contractors offer warranties that can cover up to 10 years to meet all the repairs should anything happen. Furthermore, appliances and other systems come with the manufacturers’ warranty in case they malfunction. Therefore, it is not a good idea to obtain a home warranty for a new property since this will be more like duplicate coverage of the same components.
How Much Does A Home Warranty Cost?
A home warranty is designed to cover appliances and systems, even if they are modified, improperly installed, or maintained. The cost of FAHW (First American Home Warranty) depends on the plan that you choose between basic and premium plans. The basic plan costs between $28 and $45 per month and the price depend on the locations of your home. This plan covers items like central air conditioning, pool, and pump. The basic plan also covers vital home appliances like a refrigerator, dishwasher, microwave, trash compactor, clothes washer, and dryer.
You can also consider a premium plan that costs$42 per month or $510 per year. The good thing about this plan is that it covers all items in the basic plan plus all major home systems. These systems include the following: plumbing system, heating system, electrical system, water heater, ductwork, garage door opener, and central vacuum system. You can get additional pool coverage that offers you protection for pumps, valves, timers, filters, heating units, and many more. The cost of repairing and maintaining pool equipment ranges between $600 and $2,100. Therefore, the right plan for a home warranty can significantly save you a lot of money.
Home Warranty Is A Safety Net
As you can see, after buying a new home you may be left with no money to cover eventualities that may happen to crucial systems. When any of the vital components in your home breaks down, you may struggle to repair it and this is when a home warranty comes in handy. A warranty is a safety net that helps protect your wallet during the time of need. It protects you against costly replacement and repair bills that you may not afford when your appliances and systems fail.
If you are a new homeowner, a warranty can save you money in different ways. Some of the systems in the home may be old but you do not have the money to repair them. The costs or repairs and replacements of different systems in homes are exorbitant and this is where a warranty acts as a safety net. You can just notify your home warranty company and they will have you covered.
Downsides Of Home Warranty
While a home warranty is designed to give you peace of mind and protection of your appliances and systems, there are also drawbacks that you should know. Home warranties exclude certain components, so you need to fully understand the terms and conditions before buying a warranty. Some companies also put a cap on the number of repairs that can be performed per year. These vary from company to company. It is the home warranty company that decides whether the system requires fixing or replacement. However, you may not agree with the decision, but you cannot change it.
If the system has been neglected, the home warranty company can reject the claim. This can be a challenge since it is difficult to provide the maintenance history of the system, especially if you are a new homeowner. Some home warranty companies can just cite the aspect of poor maintenance as a way of declining your claim. Elements such as power surges may not be covered by a home warranty. You need to understand what the warranty covers first.
A home warranty is designed to offer protection to home systems and appliances that are not covered by home insurance. Some of these appliances and systems can be costly to repair but they are vital in our daily lives. In case of damage or malfunctioning of appliances covered by your home warranty, you have the protection that gives you peace of mind. You can simply contact your warranty company and they will deploy technicians to fix the problem. Therefore, if you choose the right plan, you can save money given that some repairs are expensive.