Home warranties are a hot topic of discussion. We can dive into the top questions about them.
Home warranties are a great option for those who lack an emergency fund or want to protect their budget against expensive, unforeseen repairs. They can even make a smart investment for new homeowners. Looking at various companies and reading about their services and what they offer is a good way to choose a company. Some of the worst home warranty companies have awful reviews, terrible ratings, and these are the ones to steer clear of.
What is a Home Warranty?
Home warranties are service contracts that cover repair or replacement costs for a list of systems and appliances in your home. Many home warranty companies also offer add-on coverage for items like pools, hot tubs and fences.
The cost of a home warranty can vary significantly. Some companies charge a flat service fee to schedule and complete repairs, while others charge a deductible per claim.
A home warranty can be a good investment for homeowners, especially those with older homes that may have outdated appliances and systems. However, it is important to compare plans and companies before signing up for one. Make sure the contract you are considering includes coverage limits and a deductible, and find out whether those limits apply to all claims (aggregate) or per claim (per appliance or system). Also, check out home warranty company reviews and ratings before signing up.
What Are the Benefits of a Home Warranty?
A home warranty is a safety net for homeowners that covers repair costs on major systems and appliances that break down due to normal wear and tear. Home warranties are available from most reputable providers and can save new and existing homeowners from paying out-of-pocket for repairs and replacements.
Although a warranty can cost an additional expense to your budget, millions of homeowners feel that the peace of mind it offers is well worth the extra price tag. For example, imagine that just a week after moving into your new house, your air conditioner goes out. Having a home warranty would allow you to pay for repairs with a small service fee instead of thousands of dollars out of your own pocket. Plus, many plans are transferable to the next owner, which can help incentivize prospective buyers.
How Does a Home Warranty Work?
Home warranties are designed to help homeowners with the repair and replacement costs of certain appliances or systems. The best home warranty companies have terms and conditions that must be followed in order to receive service, and some things like attempting repairs yourself or hiring unapproved contractors can void the contract.
Those who are thinking of buying a new home should consider asking the seller to include a home warranty as part of the closing negotiations. It will give them peace of mind that if something breaks down, they have coverage to assist with the cost of repairs or replacement.
When a system or appliance malfunctions, the homeowner contacts their home warranty company and they send a contractor to evaluate the problem. If the issue is covered by the contract, they complete the work for a small fee.
Can a Home Warranty Be Used by Renters?
Unlike homeowners insurance, which protects you from natural disasters, home warranty coverage covers appliances and systems that experience normal wear and-tear. As a landlord, you can purchase a home warranty to cover your rental
property’s aging appliances and systems and to save yourself time when tenants’ toilets clog, the dishwasher or oven breaks down, or the air conditioner goes out on a hot day.
You should compare home warranty provider plans to find the best one for your needs. Also, be sure to review the company’s terms and conditions to see if there are any exclusions that may affect your rental properties. Finally, you should consider your tenants’ satisfaction with home warranty companies when choosing a plan. If they are dissatisfied with long phone hold times or delayed vendor visits, they may not renew their leases.
Is a Home Warranty Worth It?
Home warranties provide a peace of mind for homeowners. Before purchasing one, assess the condition of your appliances and systems, your financial ability to pay for repairs or replacements and the specific coverage options available from different providers.
It’s important to remember that a home warranty is not an insurance policy and won’t cover natural disasters like flooding or tornadoes. Also, most warranty plans require homeowners to pay the service fee for each repair visit and may not cover all issues that arise.
If you’re buying a new home, the seller may include a home warranty as part of the sale agreement. This can be helpful if the appliances and systems are older and might need to be replaced soon. However, prospective buyers should consider asking for documentation about the home warranty as well as a list of excluded items before agreeing to it.