A home warranty is designed to help homeowners cope with the costs of the unexpected system and appliance repairs. The cover takes care of malfunctions caused by normal wear and tear.
If you are planning to buy this policy for your house, there are various merits and demerits that you need to know about home warranty to make an informed decision.
I) Helps you save money. This policy can save you big-time on the costs of common repairs. Typically, warranties for homes cost anywhere between $350 and $500, which is relatively cheap considering that experts believe homeowners spend between 1 to 4pct of their income on system maintenance each year. For example, if you earn $200,000 then without a warranty plan, you would spend $2,000 yearly on repairs.
II) Peace of mind. Appliance damages can be very inconveniencing especially if they occur unexpectedly, this warranty allows you to relax and avoid the worries of regular repairs in your home. In case of a broken HVAC or leaky toilet, simply call the insurer and they’ll immediately send a technician to your home. You don’t have to pay for costly repairs that could have otherwise brought financial hardship to your household.
III) It’s a quick and easy fix. With this cover, you don’t have to spend precious time searching for trustworthy repair companies in your area, since the cover has already done this work for you. Home warranty claims can be filled online or via the phone which is available 24/7; you don’t have to wait until official business hours to get help since the policy is operational fulltime throughout the week including during the weekends.
IV) A warranty can be free in some cases. If you are buying a new home, the seller may provide you a free warranty cover for the first year. Nowadays, it’s becoming increasingly common for sellers to include this plan in their purchase contract to promote confidence and attract more buyers.
V) You can choose a policy plan that fits your lifestyle. There are various packages available depending on your budget and needs. Usually, the basic plan covers main home systems such as heating, electrical and plumbing, including appliances like your oven, dishwasher, and fans. On the other hand, with the total plan, you can add air conditioner, refrigerator, washer and dryer among others.
Some companies also provide optional coverage for items like the pool, septic system, and limited roof leaks. Moreover, customizing your policy allows you to save on home items that you’re not very much concerned about, or improve your coverage to completely cover all home repairs.
VI) Service calls are very affordable. Most home warranty service-calls are offered at a cost-effective flat rate, which is usually between $60-$150 dollars.
VII) A home warranty can save from entering into significant debt. Serious mechanical issues like plumbing system breakdown can cost 1000s of dollars to mend or replace. For those who don’t have an emergency savings account, the cost of doing this work can be unmanageable and possibly impact on your credit rating. However, with a home warranty, all your expenses will be covered so that you don’t go into debt.
a) A home warranty can’t fix what’s already been broken. If your appliances/systems have certain pre-existing conditions such as broken fixtures, they are not recognized under your home warranty plan. Most companies will require you to provide a home inspection form, showing that the items were in good form before purchasing the warranty cover.
b) The warranty policy can be more costly than some DIY fixes. If you’re a handyman and enjoy taking on DIY projects at home, you can save a lot on labor expenses. If a repair is within the skill level of a DIY, some homeowners may find it cheaper to do it themselves rather than buying a home warranty.
The typical cost of a warranty cover is between $217 to $1,423 dollars. However, those shopping for this plan need to take into account the overall cost of premiums as well as the cost of deductibles. Most companies provide plans that become effective one month after the new homeowners sign the necessary paperwork, they may also charge a small deductible every time you contact them for repair or replacement of items.
In conclusion, a home warranty can protect you from unwanted expenses in system repairs. However, it’s important to know the advantages and disadvantages of taking this coverage before signing up for it.