Ins and Outs of Home Warranties and Why You Must Insist on Getting One

If you’re a homeowner, then you’re all too familiar with appliance and system breakdowns. If you’ve purchased an older home with older appliances and systems, it’s possible the out-of-pocket cash you’re spending to keep them running is costing you an arm and both legs.

Enter the home warranty. Says the professionals at Cinch Home Services, a home warranty typically covers the cost of replacing or repairing home systems and appliances. Regular maintenance of your appliances and systems, which a home warranty includes, will afford them longer life, but inevitably won’t prevent breakdowns from occurring.

With that in mind, this article tells you all you need to know about what does a homebuyer’s warranty cover and what it doesn’t cover. According to Investopedia and other publications like it, consider the following disastrous scenario: it’s only a few days before Christmas. You have family coming in and your furnace goes on the fritz. Without heat, it will be freezing inside and outside the house. So, what do you do?

You immediately place a call or jump onto your home warranty website and make an emergency request for service. Service professionals arrive within hours and fix the HVAC systems. The Christmas holiday is saved thanks to your having purchased a home warranty.

But if you’re still not sure if a home warranty is right for your home, here are some frequently asked questions that might help you decide if it’s the right security blanket for you and your family.

Defining a Home Warranty

A home warranty is a service contract that covers the cost of repairs and replacements of many appliances and systems in your home. Though plans differ, most home warranties cover your heating, cooling, plumbing (hot water heater), and electrical systems. Some also include roof leaks and other structural damage. Many plans cover your everyday appliances, such as the refrigerator, stove, dishwasher, washing machine, and dryer.

You usually can purchase additional coverage that applies to a pool, spa, and more appliances. Most warranty companies will be willing to work with all your wants and needs as a homeowner.

What’s the Main Difference Between a Home Warranty and Homeowner’s Insurance?

Typically, a home warranty is engineered to cover the everyday wear and tear of your home systems and appliances. Homeowners insurance on the other hand, covers unexpected damages that tend to result from unexpected severe weather events, heavy winds, torrential rains, excessive snowfall, and fire.

For instance, if you have purchased flood insurance and your home unfortunately floods, the insurance should, in theory, cover all the damage that occurs to your home, including the appliances and systems.

But, if your refrigerator motor dies less than ten years after you first purchased it, homeowners insurance will not cover it. The refrigerator’s warranty will likely be out of date also. But a home warranty will cover the cost of repairs.

At base, a home warranty and homeowners insurance serve to compliment one another. They also help to keep your home’s systems and appliances functioning at optimum capacity.

How a Home Warranty Works

By now you might be wondering how exactly a home warranty works. When the day comes for your home HVAC system or one or more of your appliances to stop functioning (and it will happen), you will need to make immediate contact with your contracted warranty company.

A reputable contractor that’s contracted with the warranty company will be dispatched to your house to make the necessary inspections, assessments, and inevitably, repairs your systems and appliances. That is, they don’t need replacing.

Your home warranty contract will come with a monthly or annual cost along with small service fee with every call. But the costs associated with replacement or repair are said to be covered entirely by the warranty company.

Typical Home Warranty Length

Most home warranties will last about one year before you need to renew your contract. Prices vary from plan to plan according to the number of appliances you own and the complexity of the systems. If you pay per month, the cost can run you anywhere from $25 to $100+, depending on what you would like to have covered.
It’s possible some companies will even give you a free month just for signing with them.

Homes need constant maintenance and repair. Home insurance will not cover the expenses associated with this. The out-of-pocket expenses that can go with keeping your house in ship shape can add up quickly and deplete your savings. But by purchasing a home warranty, you can save yourself a lot of money and a lot of anxiety-filled, sleepless nights.