If there’s one thing you can be sure of as a homeowner, it’s not death or taxes, it’s system and appliance breakdowns. The older these items get, the more breakdowns you can expect. Enter the home warranty. A good warranty can cover all those out-of-pocket expenses that can wipe out your cash savings if you’re not careful, or so warns the experts at Cinch Home Services. Are home warranties worth it? you might find yourself asking again and again, despite knowing you will be facing system breakdowns sooner than later.

Cinch states that all too often people think of a home warranty as something that’s engineered for newly purchased homes or if you occupy an older home. Turns out both are true. But at base, home warranties are designed to protect people who want to limit their out-of-pocket expenses, or who plan to put their home on the market sooner than later.

With this in mind, let’s dive deeper into the mechanics of a home warranty. According to a recent article by Forbes, having to make repairs are an integral part of living in a home whether you own or rent. Faucets leak, appliances break down, and HVAC units suddenly stop for apparently no reason in the middle of a summer heatwave. Instead of plowing through your savings to take care of these repairs, some people opt to purchase a home warranty that can alleviate many of the home repair costs.

But again, the question of whether home warranties are worth it in 2023 and beyond begs to answer. First, you need to know what precisely a home warranty entails.

Assessing the Value: Is Purchasing a Home Warranty a Wise Decision

Defining a Home Warranty

Home warranties are inexpensive, renewable home service plans that offer discounted replacement and repair services for households that cover both system and appliance breakdowns. Coverage depends on the type of coverage you require, and contract terms will vary from home to home. The home warranty is different from homeowner’s insurance, so you should be aware of what each cover and don’t cover.

Homeowner’s insurance usually protects policyholders against any damage that occurs to personal property via events that you can’t control, like theft, fire, or severe weather. Home warranties cover damage caused by everyday wear and tear.

Typical Coverage Contained in a Home Warranty Policy

Said to complement home insurance, home warranties typically cover most major components of your home systems. These can include but are not limited to water heaters, boilers, HVAC, electrical, and plumbing systems.

Many plans also include appliance coverage such as stoves, refrigerators, washers, and dryers. It’s also possible to purchase add-on coverage for swimming pools, pumps, spas, a second refrigerator (the one you keep in the garage to keep beer and soda cold), septic systems, and more. It all depends on how much you wish to pay per month or year for your home warranty.

How a Home Warranty Works

You purchase a home warranty for either an annual or monthly fee. Contractually speaking, you can expect a fixed service call fee plus annual coverage limits for the repairs you need. Coverage limits and service fees will vary depending on the company, so it’s wise to do your homework when it comes to finding the right company that suits not only your needs and wants but also your pocketbook. After all, these are tough financial times we’re living in.

If and when you encounter a home appliance or system breakdown, you can contact your warranty customer support team by phone or even file a claim online. A good, reputable company will then connect you to an approved service provider who will assess the issue, and hopefully go about performing the repair.

Items Home Warranties Do Not Cover

There’s very little a home warranty won’t cover when it comes to household systems and appliances. The extent of your coverage will depend not only on the warranty company you choose but also on the level of coverage you are willing to pay for.

Generally speaking, however, some everyday items are excluded from home warranty contracts, such as:

–Commercial-grade systems and equipment
–Portable window AC units.
–Structural foundation, paint, flooring, and wall issues.
–Pre-existing home conditions.
–Sediment, corrosion, and rust.
–Improper installation and maintenance, plus manufacturer defects or previous repairs that occurred before the purchase of the home warranty.
–Asbestos, radon, and mold removal.
–Zoning and building code violations.

Home Warranties Are not the Same as Home Insurance

Says Forbes, whether you’ve just purchased your first home or your third, there are lots of important things to keep in mind. One of these is being aware of the key differences between homeowner’s insurance and a home warranty.

A home warranty will cover the costs of repair, replacement, and servicing of systems and appliances due to normal wear and tear. Home insurance, on the other hand, protects you in case of a fire, a storm, a theft, or an accident that occurs on your property which can lead to bodily harm. In other words, home warranties fill the gap created by home insurance.

Owning a home can be one of the best investments you’ll ever make. But they require constant maintenance. For less than $100 per month, you can purchase a home warranty that will not only take care of the home appliance and system repairs, it will help you sleep better at night knowing you’re in good hands.