Basics of a Home Warranty

For some people, managing finances is one of life’s biggest challenges. This can be especially true when it comes to owning a home. Most likely, this is the most significant purchase you’ll ever make and will be your largest investment. The costs of owning and maintaining a home can be steep. To make it safe and comfortable requires commitment and preparation.

Inside your home, you have various systems and appliances. Some of these offer convenience, while others are essential for modern living. No matter how high the quality of these items may be, they will eventually break down and stop working effectively. If necessary repairs or replacing the items come during a financially difficult time, you might have to do without these things for a time.

Of course, there is a way to avoid putting yourself in a difficult position with your budget. Having a home warranty can save you money and eliminate a lot of stress and hassles. Consider how this coverage works and whether it makes sense for you and your needs.

Not Required

Anyone who has a home mortgage knows that having a homeowner’s insurance policy is necessary. This plan covers your home against loss and damage in the event of a disaster or catastrophe. A home warranty plan, conversely, is a voluntary purchase. This is a benefit but is not a requirement as a homeowner. You can decide whether to have this coverage and when to buy it.

Covers Repairs and Replacements

A home warranty offers protection when something in your home stops working properly. Unlike insurance, this coverage wouldn’t come during a time of natural disaster or a theft from your home. Instead, you can file a claim when wear and tear have caused something to break down and no longer function correctly. It will also be valid when an item breaks unexpectedly or suddenly.

Covers a Wide Range of Items

A home warranty has many benefits and offers various advantages to you as a homeowner. One of these is that it applies to many useful elements in your home. This includes those items that you rely on every day.

The warranty will cover the cost to repair or replace kitchen appliances such as your fridge, built-in microwave, dishwasher, stove and oven, and garbage disposal. It also provides coverage on your washer, dryer, and water heater. A home warranty extends to home systems as well. This means you will have coverage when you need to fix the HVAC, plumbing, or electrical systems or replace any of those. The coverage also includes your roof, sprinkling system, and even a swimming pool, if you have one.

Duration and When to Get the Coverage

If you buy a brand-new home, the builder will include a warranty with the purchase. It lasts one year from the time of your closing. Once this coverage is up, you can extend the warranty by buying a new one. You don’t have to purchase the warranty immediately. You can enjoy this benefit at any time during your ownership. Once a new warranty starts to take effect, it will also last for one year.

The Costs

Like insurance policies, a home warranty has an annual premium. You can pay this all at once when you purchase the plan or break it up into monthly payments. Warranties vary in cost, but you can expect to pay somewhere in the $500 range. Some plans may be as little as $300, while others can go up to $700 or more.

What Happens When You Make a Claim?

When an appliance or system starts to falter, you can contact the warranty provider. The company will process your request and ask you a few questions about the item and what has gone wrong. The company will send a licensed professional to your home to assess the damage and diagnose the issue. Next, the technician will determine whether repairs can get it working again or whether replacing it is necessary. The service professional will then handle all of this work, and all you will have to pay is a service call fee.

Limitations and Exceptions

Not all situations fall under the warrant’s coverage. In some cases, you may have to pay for repairs or a new installation. The warranty does not cover damage that occurred because you did not use the item properly or because you neglected to take care of the appliance or system. Also, breaking it on purpose will invalidate the coverage for that item. Be aware that there is also a cap on how much the warranty will cover per item and incident.

For peace of mind and financial help, a home warranty is a must. Review the various elements of this coverage so you can know whether this plan is right for you. During a time of need, this coverage can save you a lot of money. It can also relieve stress and anxiety.