As a homeowner, unexpected and costly repairs can be a real concern. That’s where a home warranty comes in—it might just be the solution you’re looking for. But before diving in, let’s explore whether it’s really worth it.

In the past, home warranties have had a bit of a bad reputation. However, like any warranty or insurance policy, the upfront cost might just pay off in the long run. Of course, it’s essential to read the fine print and understand all the terms and conditions!

So, what exactly is a home warranty?

Think of it as a policy that covers repair work on your home’s main systems or appliances. Typically, you purchase it through a home warranty company. It’s different from your homeowner’s insurance or a manufacturer’s warranty. For example:

– It covers labor to fix a failed part that your manufacturer’s warranty doesn’t cover.

– It pays for the plumber to fix a broken pipe, but not the resulting damage to your home, which your insurance policy should cover.

In essence, it works alongside other home policies when something goes wrong.

It’s crucial to note that a home warranty is different from home insurance. It’s similar to how car insurance and a car warranty cover different things. Home insurance handles unforeseen damage and catastrophes, while a warranty fixes things that break earlier than expected.

Now, let’s look at what’s typically covered and the yearly cost:

Policies usually include systems like air conditioning, heating, water heaters, furnaces, plumbing, and built-in appliances such as refrigerators or dishwashers. You can add extras like swimming pool systems for an additional fee. A year of coverage typically costs $500-$1000 with a $75-$100 deductible for service calls.

Who can purchase a home warranty?

Some warranty companies allow long-time homeowners to buy a warranty, a significant improvement over the past when they were only available to new homebuyers at settlement.

Before making a decision, what do consumers need to know?

Reading over the fine print of your contract is crucial. Here are some typical things to be aware of:

– Covers repairs but not always replacements for large systems.

– Won’t cover breakage due to poor maintenance.

– Excludes certain items, like covering refrigerator repairs but not the ice maker.

– Doesn’t cover items beyond a certain age or beyond their serviceable life.

– Doesn’t cover pre-existing conditions or roofs and exterior items.

So, what happens when you need something repaired?

You need to contact the home warranty company first. They’ll then send their service providers to your home. They pay the service provider once the claim is approved. If you call a service provider without contacting them first, the repair may not be covered.

However, keep in mind that you don’t control who comes to your home for repairs, which could be a downside if you have to wait a long time.

What if something isn’t covered when you thought it was?

Like any warranty, there are times when the company might choose not to cover something. That’s why it’s crucial to read the fine print!

Lastly, what should you look for in a home warranty company?

– Find a reputable company with good recommendations.

– Check its long-term history and Better Business Bureau information.

– Compare coverage levels, upgrades, deductibles, and service fees.

– Understand any co-pays and exclusions in the contract.

– Know how you can cancel a contract.

Feel free to reach out if you have any questions about getting a home warranty, whether you’re a current homeowner or a new homebuyer. Simply email me here.