Top Reason Why Homeowners Will Invest in a Home Warranty 

A home warranty is a great investment for homeowners who haven’t accumulated enough savings to cover expensive repairs. The annual premium, coupled with service call fees and deductibles, can easily pay for itself in the case of an emergency. 

Home warranties also make sense for hands-off homeowners who prefer to leave repair and replacements to professionals. However, it’s important to shop around because premiums, deductibles and coverage vary greatly. 

1. Peace of Mind 

Millions of homeowners rely on home warranties to ensure that their appliances and systems won’t break down unexpectedly, leaving them with costly repair or replacement costs. The annual premium and service call fee typically cost less than a few hundred dollars, and many homeowners find the peace of mind to be worth the risk. 

However, it is important for consumers to carefully review the policy before making a final decision. Some home warranty companies exclude coverage for smart devices, which can be expensive to replace. And, if you take the time to learn how to perform basic maintenance tasks and repairs, you may be able to save hundreds of dollars annually. 

Many home buyers also feel more comfortable purchasing a new home with a home warranty, and some sellers offer a warranty as an incentive to close the deal. Buyers should do their research to ensure the company offers a reputable service and uses reliable contractors. 

2. Predictable Costs 

A warranty appliance contract costs several hundred dollars a year, paid up front or in installments. Then, you’ll pay a Service Fee each time you request repair or replacement services. That covers the cost of the professional to investigate and determine if your breakdown is covered by your plan. 

A new homeowner may spend hundreds or thousands on unexpected repairs right after moving in if they don’t have a home warranty. This is why many first-time homeowners opt to purchase a warranty. 

The National Home Service Contract Association explains that most plans cover costs from normal wear and tear. However, warranties often exclude preexisting conditions and items that were improperly maintained or installed. This is why it’s important to review the contract describing standard coverage, optional coverage and upgrades. Home warranties are also a selling point for landlords who want to attract tenants and buyers. They can offer the warranty to entice interested parties and make the sale go through faster.

3. Increased Home Value 

A home warranty isn’t an essential piece of homeownership, but it can increase a property’s value. Studies have shown that homes with warranties sell faster and for more money. 

This is because buyers are often reassured by the fact that major systems and appliances are covered, as well as being more confident in their ability to handle basic maintenance and repairs after moving in. 

Many home warranty companies allow homeowners to transfer their coverage to the new buyer, though this may incur an additional fee and will need to be negotiated as part of the sale process. 

Whether or not a home warranty is worth it for you depends on your needs, budget and lifestyle. However, if you can afford to invest in a home warranty and have an emergency fund that can cover unexpected expenses, it can be a smart financial decision for most homeowners. If not, learning to handle minor repairs and developing a routine for maintaining your appliances can help keep them running smoothly for years to come. 

4. Reduced Stress 

A home warranty can reduce stress for homeowners, as they don’t have to worry about unexpected repairs or replacements. Instead, they can call their provider for help and have the company send a professional to fix the issue. 

Home warranties can also be beneficial for first-time homeowners who may have little experience with fixing appliances and systems. They can rely on the expertise of a home warranty company to find contractors and complete repair work quickly. 

As a bonus, many home warranties are transferable to new buyers, which can be an incentive for sellers who want to attract prospective buyers. This can help to ease concerns about the condition of a home and provide peace of mind for both parties during negotiations. Additionally, it can reduce stress during the listing period if a covered appliance or system breaks down, as the home warranty company will take care of it. They can even help to make listings stand out in the market.