If you buy or are buying a home, someone will mention the need for a home warranty policy. But the biggest question is what are they dealing with and do they really need one. I want to help you decide the answer to that question.
What is a Home Warranty?
A home warranty provides peace of mind by providing financial protection for major appliances and critical systems in your home. You can purchase a home warranty plan at any time, but some sellers or owners of rental properties purchase the plan as part of the real estate transaction.
Regardless of when or why you purchase a home warranty, comprehensive coverage protects essentials like kitchen appliances, clothes washers and water heaters. Keep reading to learn more about general service limits, service call charges, repair processes and more.
What does the Home Warranty guarantee?
Home warranty coverage depends on the company you use and the plan you purchase. However, most home warranties include repairs to parts for your home work, such as:
- Electrical system.
- These are major appliances (washers, dryers, refrigerators, etc.).
- Air conditioning and heating (HVAC) system.
- Hot water storage tank.
The more you need home warranty service (like pool pumps or garage door switches), the more monthly or yearly bills you will pay to the warranty company.
How does a home warranty work?
Imagine you’re using a cool new refrigerator you bought last year, and it suddenly dies as soon as the manufacturer’s warranty expires. If you don’t have a home warranty, it can cost hundreds or thousands of dollars to repair or replace.
If you get a home warranty from HWA, you can file a claim online or with our customer service department and we’ll handle the rest. When you receive a claim, contact an approved service provider to assess the problem and have the unit or system repaired as soon as possible.
How much does the home warranty company charge?
Homeowners are often required to have homeowners insurance along with their mortgage, but home warranties are completely optional. Basic insurance premiums start at about $300 and go up to $600 for more comprehensive plans, Bell says.
Homeowners can include additional features, such as a pool, various appliances or an outside well, in their maintenance contract if needed.
Many home warranty companies offer plans to homeowners at any time, but buying them when you first become a homeowner can often prevent a good deal. Whether you’re buying a condo or a single-family home, you deserve these plans. In addition, some warranty plans are of the “Build It Yourself” type, which means you can customize the plan by default to include specific systems (such as plumbing) and appliances, or include additional add-ons such as air conditioning tweaks.
“Home warranties provided in real estate transactions tend to provide the most comprehensive coverage and price points, so now is the perfect time to lock them in,” Bell said. “It says.
At the end of the first year, you usually have the option to extend the warranty on your home or go to a service provider.
What does a home warranty not cover?
A home warranty usually does not cover structural items such as walls, windows, and foundations. Other items such as additional appliances (refrigerators, ceiling fans, water heaters) that are not mentioned in the original agreement may also be excluded.
Looping is often provided as an add-on, but it does not apply to patios, terraces and some garages. It is important to check the contract details to see what items are covered.
Below is a list of some items that are usually not covered by a home warranty agreement. It varies from company to company, and excluded items may vary.
- Appearance damage.
- Lighting fixtures.
- Outdoor water system.
- Booster pump.
- Remote control.
- Handles foreign objects.
- Appliance accessories.
Home insurance vs. home warranty.
Home warranties and home insurance may look the same, but they are two different types of coverage. A home warranty is usually a one-year contract that reimburses you for the cost of maintaining a failed system or appliance in your home. This warranty is optional and protects certain items in the home, such as air conditioning systems, plumbing fixtures and dishwashers. Warranty coverage usually covers repairs and replacements needed due to breakdowns caused by general wear and tear.
Mortgage lenders, on the other hand, require homeowners to have valid homeowner’s insurance. Homeowner’s insurance is a standard policy that protects you against unforeseen disasters or risks and related expenses. Some risks or losses commonly applied to this type of insurance include wind, fire, vandalism, hail and theft.
How much does a home warranty cost?
A typical home warranty plan costs between $220 and $1,850 per year (usually divided into monthly payments). Some warranties can cost a little more, depending on the home and the warranty period. And that’s in addition to the maintenance fee you pay every time you request repairs. That’s not cool.
The price depends on the type of property you live in and the type of insurance you are looking for. There are different home warranty plans, and some are better than others.
And if you’re buying a new home yourself from a builder, the pre-sale often includes a one-year warranty. These include built-in appliances, air conditioners and water heaters, etc.
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