A home warranty is a plan that you purchase to cover the repair or replacement of the appliances and systems in your home. You’ll pay an annual premium for the warranty and you may also be subject to a small deductible when you use the service. The contract covers the normal wear and tear that your appliances and systems endure with everyday use.
It should be noted that a home warranty is different than homeowner’s insurance, builder’s insurance, and the extended warranties that you can purchase for particular appliances. Homeowner’s insurance covers your home from damages sustained during severe weather events like tornadoes or hurricanes or in the event of theft or vandalism. Builder’s insurance covers damages to the actual structure of your home. And, finally, extended warranties cover damages to specific appliances or systems in your home.
A home warranty, on the other hand, will cover damages to an entire set of appliances and home systems. Here are some of things that home warranties typically cover:
As you can see, home warranties offer service and repair for a wide variety of the appliances and systems on which you rely on a daily basis.
Who Should Purchase a Home Warranty?
The general rule of thumb is that appliances that are four years or older will benefit from being covered by a home warranty plan. That’s because they are more likely to break down due to the extensive wear and tear that comes from multiple years of use.
If you’re not sure whether or not you’d benefit from having a home warranty, you may want to hire an experienced home inspector to take a look at your home and the appliances that you own. They’ll help you determine whether or not it’s a good investment.
What are the Benefits of a Home Warranty?
There are a lot of benefits to having a home warranty. The bottom line, however, is that it can save you a lot of money in the long run. Homeowners spend an average of $300 a month on home repairs and general maintenance. While the cost of a home warranty will vary based on the size of your house, what you’re covering, and where you live, these contracts generally cost somewhere between $300 and $600 a year.
So, whether or not a home warranty is a good investment comes down to very simple math. If you’re spending an average of $300 a month on home maintenance—and even if only a third of that is going towards the repair of the types of appliances and systems that your home warranty will cover—purchasing a home warranty could save you hundreds of dollars a year.
Here are some of the other benefits to having a home warranty:
How Does Repairing or Replacing an Item Under a Home Warranty Work?
If one of the appliances or systems covered by your home warranty breaks down, you’ll file a claim and a trusted and experienced contractor will come to your home to determine the extent of the damage. After that, your appliance or system will be repaired (if possible) or replaced. It’s a simple, fast, and convenient way to make sure that the appliances and systems that you depend on everyday are always working.