Home warranties are a great contract which covers the costs of replacing or repairing major systems and appliances in your house. Many home buyers get a home warranty as part of their purchase agreement, but you don’t have to buy a home to purchase one.
While a home warranty can help save you money on unexpected repairs, it’s important to understand what is and isn’t covered by a typical policy. It may be more cost-effective to pay for a home warrantee than to insure your property against possible damage.
What’s covered under a home warranty?
Home warranties typically cover major home systems, such as electrical, plumbing and heating. Some warranties include garage doors openers and whirlpool tubs.
Policies vary, so it’s important to read the fine print of your policy to see exactly what is covered. Most home warranties don’t cover cosmetic or pre-existing damage.
What Does a Home Warranty Cost?
Many consumers place budget as a top priority. It is important to consider the following: Cost of a home warranty per annum The cost of a home warranty can be between $300 to $600. Home warranty companies may also charge $50-100 service fees for each claim.
When you compare the cost of a home warranty to the cost of making a major repair, it’s easy to see why many people find them to be a worthwhile investment. An example: The cost to replace an HVAC unit is $5,000. A water heater repair costs $600.
However, it’s important to remember that home warranty policies have limits. Many home warranty companies only will pay $1,500 per item. Others have a $5,000 maximum.
Home warranty pros and cons
If you own a home, a home warranty could be worth it. An older houseIf you own a large home or have a high-priced house, it is more likely that your home will need to be repaired. There are many other advantages to a home warranty.
Covers Unexpected Repairs
Unexpected repairs can be budgeted for with a home warranty, which is one of the greatest benefits of having one. Rather than having to come up with hundreds or even thousands of dollars to fix a broken furnace, you’ll only have to pay the relatively small service fee required by your home warranty company.
Protection Against High Repair Costs
Repairs covered under a home warranty may not always be affordable. Repairs to an air conditioner in middle of the summer can cost you hundreds of dollars. With a home warranty, you won’t have to worry about shouldering the entire cost of these repairs.
It gives you peace of mind
The best thing about a home warranty? It can provide you with peace of mind, knowing your home will be protected from expensive repairs. If something goes wrong with a covered item, you can simply call the home warranty company, and they’ll take care of it. For first-time home owners, this can provide a great relief as they are less familiar with handling unexpected repairs.
Cons of Home Warranties
Home warranties may not suit everyone. This is especially true for those looking to reduce their spending. A home warranty can have some drawbacks.
Services fees can add up
The downside of home warranties is the fact that they can be more expensive over time. In most cases, you’ll have to pay a service fee every time you need to use the warranty, ranging from $50 to $100. If you need multiple repairs within a single year, these fees could quickly mount up.
The coverage may be limited
The downside of home warranties is the fact that they might not include everything. Most home warranties cover the major appliances and systems, such as your furnace, water heater, air conditioner or air conditioner. If you have an older home, or if you’ve made extensive renovations, there’s a chance that some of your home’s components may not be covered by a warranty.
It is not possible to find it in all areas
Also, not all regions are eligible for home warranties. Some home warranty companies are limited to certain areas or states. This means that if you live in an area where home warranties are unavailable, you won’t be able to purchase one.
Are Home warranties worth the cost?
There are many factors that will determine whether or not a home warranty costs a lot of money. A home warranty might be worthwhile if your home is older, more expensive, or if repairs are likely.
On the other hand, if you’re comfortable handling your own repairs or live in a newer home that isn’t as likely to need repairs, you may want to forego the expense of a home warranty.
It doesn’t matter if a home warranty costs more or less. You’ll need to evaluate your own situation to decide if a home warranty makes sense for you.