Home warranties make sense whether you’re purchasing your dream home or protecting the one you already own – but what exactly are they covering?
Short and sweet: A home warranty isn’t an insurance policy – it’s more like a service contract that covers repair and replacement costs for appliances and systems within your home.
1. Peace of Mind
Home warranties provide peace of mind by protecting you from unexpected repairs if anything breaks. They’re especially helpful for homeowners on tight budgets or those without much savings set aside for emergencies.
Home warranties will cover some repairs and replacements, but it’s always wise to review your contract to be sure you are covered. Be wary that some providers can deny claims if evidence can show that an appliance or system was broken prior to signing for coverage.
Purchasers of new homes often opt to purchase a home warranty to help facilitate the process and give peace of mind that any unexpected repairs won’t have to be paid for immediately. You can check out your documents to see if your home warranty covers electronics or other valuables.
2. Reduced Out-of-Pocket Expenses
Home warranties tend to be more cost-effective in the long run than paying out-of-pocket for costly repairs and services, like roof replacement or electrical repairs. With just a fixed monthly or annual premium payment, they provide protection from costs that would otherwise stretch your budget or force you to dip into an emergency fund.
Home warranty providers who deliver excellent services provide clear contracts that outline terms, conditions and exclusions so there are no hidden surprises in the fine print – which gives millions of homeowners peace of mind with reliable companies providing their protection and peace of mind services.
An alternative approach would be saving for emergencies in a rainy-day savings account; however, that approach may not offer as much financial security. A home warranty plan provides that security.
3. Reduced Risk of Unexpected Breakdowns
Home warranties provide financial protection from unexpected breakdowns of appliances and systems in your home that occur due to normal wear and tear, making budgeting expenses simpler without unexpected costs becoming a source of worry.
Home warranty companies generally provide access to a network of professional service technicians that specialize in repairs and replacements for their customers, making life simpler for homeowners who don’t possess extensive handyman experience or who lack reputable providers for repairs or replacements. This is particularly helpful for first-time home buyers who may lack the requisite skills needed to repair or replace systems or appliances in their own homes, while it protects you from secondary damages caused by appliance breakdown; for example fire damage from malfunctioning HVAC units are typically covered under home warranties.
With a home warranty plan, you have access to a network of professional service providers who will save time by not needing to find contractors on their own. Simply call up and explain what’s wrong and they will send someone over immediately to evaluate and repair or replace as necessary.
One disadvantage of owning a home warranty is that it doesn’t cover every issue, making research on different companies before purchasing one important to find out exactly what is covered and which contractors need to be chosen from a list provided. Unfortunately, this practice may not suit every consumer but it can help keep prices down and save them money!
Home warranty companies have an important presence, so it is wise to conduct some due diligence before selecting one. Before making your choice, be sure to read online reviews from consumers posted online as well as any complaints filed with Better Business Bureau, Consumer Affairs or state officials for warnings or complaints against that particular home warranty company. Also take note of their policy cancellation flexibility: this should allow free cancellation within 30 days and transferability when moving or selling a house.
However, many online review websites simply sell home warranty companies and earn commission when their links are clicked on. A better solution would be creating your own rainy-day savings fund and investing it so it grows over time – this way when repairs arise you have something set aside to cover costs.