Should You Get a Home Warranty?

Modern house design in the Philippines with home warranty.

If you have bought a home, irrespective of whether it is first hand or second hand, you are going to be asked to get a home warranty. As a matter of fact, sometimes the seller might offer to purchase one for you for giving you the peace of mind. It makes you feel that is any element of the home fails; you will be able to fix it within a reasonable cost. In case the seller doesn’t, you are going to get several mail solicitations for buying the home warranty as the sales close. A home warrant might appear as a good option to you as it will provide you with financial protection of unforeseen repairs. However, the question is, is it really worth it?

Home Warranty: What is it?

Keep in mind that home isn’t the same as homeowners insurance. Also, it is not an alternative to home insurance. Homeowners insurance is known to cover a significant portion of perils such as hail, fires, property crimes, and also some water damage which can have an impact on the whole structure and personal possessions of the homeowners. While a home warranty is not going to cover all these. It covers some particular components of your home. Our choice home warranty review will give you an insight into this.

A home warranty is actually a contract in between the homeowner and the company offering the discounted service or repair and replacement on the major components of your home like air conditioning, furnace, electrical system, and plumbing. Sometimes, the warranty might cover some primary appliances of your home like dryers and washers, swimming pools, and refrigerators. A majority of the plans will have some common elements which will provide you with some specific coverages. You will also be able to buy a few optional elements which offer added coverage with some extra bit of money.

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In the case of a home warranty, the provider will have an agreement with a service provider. When something that is covered by the home warranty breaks own, you have to get in touch with the home warranty company. Thereafter, they will send a service provider for checking out the problem. In case the provider decides the repair or the replacement is going to be covered by the warranty, they are going to get the work done. All you have to do is pay the service fee along with money which has already been spent on purchasing the warranty.

How much does it Cost?

For a home warranty, you will have to pay a few hundred dollars every year. You will have to pay the money upfront. The cost of the plant depends on the type of property. The cost doesn’t vary with the age of the property unless your home is brand new that augments the coverage cost. The square footage of the home is not going to affect the cost in the majority of the case unless your home is 5000 sq. feet. In case your house has a separate structure such as the guest house, it might not be covered by the basic policy but might be covered through payment of additional fee. Nonetheless, garages are known to be covered by the base policy.

Apart from the annual premium, you will be charged with a service fee which differs from $75-$125 every time you ask the service provider to come to your house to check out the problem. In some cases, the problem might require more than one contractor to pay a visit. During these times, you will have to pay a service fee to every contractor that is visiting your house.

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If you have a home warranty, it does not necessarily mean that you will not even have to spend a penny on your home repair. Keep in mind that some of these problems are not going to be covered by your home warranty. It might be because you didn’t buy the covered or the company doesn’t offer one for the item. As a matter of fact, home warranties aren’t applicable to components which haven’t been maintained well. When it denies a claim, you will have to pay the service fee and get the appliance repaired.

Advantages of Home Warranty

Like every other warranty, this will offer protection against unforeseen large repair bills and give you the peace of mind. If you do not have an emergency fund or one to protect one, the warranty can act as a buffer. This is also beneficial for people who don’t want to bother about tracking down a contractor when they require one. If you have expensive appliances at home, a warranty can be a good choice for you.

Generally, the topic of warranties comes up when you sell or buy a home. It serves as a reassurance to buyers who have limited knowledge regarding how well the components are being maintained. It can be a good option for someone who has used their saving for buying the home as this will help them to avoid added expenses. If you are selling the house, getting one of these will give you the protection against the complaints of the buyers regarding home defects which might arise with the closing of the sale.

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Drawbacks of Home Warranty

One of the primary problems of home warranty is that it is not going to cover items which are not being maintained properly. What is proper maintenance is not quite clear and the warranty companies might use this against you. You and the warranty provider might disagree regarding what constitutes of the term proper maintenance.

Another problem might arise when you buy a used home, it might have a 10-year-old furnace which was not maintained by the previous owner. In such cases, no matter how hard you try, you will not be able to fix the lack of maintenance by the previous owners.

It might not be expensive enough but there might be some when you pay the annual warranty fee but nothing actually break down in the house.

Hence, it can be said that home warranty isn’t the perfect way out to the risks that the homeowners have to face.

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