A home warranty covers the service, repair, or replacement of home systems and appliances. The coverage protects homeowners from large bills in case of system malfunctions. There are many home warranty companies to choose from, but it is essential to understand how exactly home warranty protection works and what is covered. Keep reading for more information.
What Is a Home Warranty?
Homeowners can purchase home warranty protection at any time, and is often purchased during the sale or purchase of a home. This service is different than homeowner’s insurance, which covers property damage from theft, fire, hail, wind, or other catastrophic events.
A home warranty covers appliances and systems that aren’t covered under homeowner’s insurance. A home warranty provides peace of mind for a homeowner. They can get systems repaired or replaced for a service fee ranging from $50 to $150.
Different policies cover different systems, so interested individuals should read a contract carefully. Comprehensive policies will cover appliances and major systems like heating and air conditioning. Homeowners can purchase additional coverage for well pumps, septic systems, or sump pumps.
Typical home warranties cover electrical systems, ductwork, heating, plumbing, and water heaters. They usually cover appliances such as dishwashers, garage door openers, garbage disposals, ovens, ranges, cooktops, and refrigerators.
The contract will always state what systems and appliances are covered. However, they do not cover changes to new equipment. For example, if a homeowner needs a new air conditioning system, the warranty may cover the new unit but not the ductwork or plumbing required to install the new unit.
Home warranty companies usually do not cover pre-existing conditions, cosmetic problems, damage from pests, items still under a manufacturer’s warranty, or damage from improper installation or misuse.
The Pros of a Home Warranty
Home warranties can be a solid investment for individuals with older homes or appliances. It reduces the out-of-pocket cost that homeowners may have to make for repairs or replacements.
The Cons of a Home Warranty
While a home warranty can be a good investment for some people, others may find they pay more than they get out of it. Usually, home warranties do not cover new appliances or pre-existing conditions. In addition, outside contractors aren’t usually covered, and homeowners must use whatever service technician the warranty company calls to take care of the repair.
Purchasing a home warranty may be helpful when selling a home to provide financial protection to the buyers in case an item break. For individuals buying a new-to-them home, a home warranty may also provide peace of mind that major repairs or replacements will not be an expense in their first year as a homeowner.
How to Choose a Home Warranty Company
For individuals who like to choose their service provider, choose a company that will allow some choice in this area. Choose a company that is accredited and complies with state regulations. They should have a call center open 24 hours a day. The Better Business Bureau is always a good place to check for the reputability of a company.
Many homeowners consider a home warranty a good choice, but do some homework before investing in this service.