Are Home Warranties Worth It?
Are home warranties worth it? If you buy a previously owned home, it might be a good idea to have a home warranty plan.
A home warranty plan can help homeowners avoid the high cost of repairing or replacing appliances or home systems. It’s not a perfect plan, but for many homeowners, it’s worth it.
What is a home warranty?
A home warranty is a service contract that pays for the repair or replacement of many of the most common home system components and appliances that fail over time.
Most home warranties are good for one year and can be renewed.
In addition to standard coverage, many home warranty companies offer optional coverage for items like a swimming pool, hot tub, or septic system.
Home warranties are not the same as homeowners insurance. While both cover some of the same systems and appliances, homeowners insurance also covers the structure of the home, personal property, and liability.
Home warranties are meant to protect the homeowner from unexpected repair costs and to provide peace of mind.
Home warranties are also available to sellers and buyers of homes.
Home warranties can be purchased by the seller of a home to protect the home while it is listed and to provide peace of mind to the buyer.
Home warranties for buyers are typically paid for by the seller and protect the buyer from unexpected repair costs.
What does a home warranty cover?
A home warranty is a service contract that covers the cost to repair or replace a home’s major systems and appliances. The warranty will outline what is and isn’t covered, as well as any deductibles or service fees.
Home warranty coverage will typically include:
• HVAC systems, including air conditioning and heating
• Plumbing systems
• Electrical systems
• Kitchen appliances, such as the oven, range, dishwasher, and garbage disposal
• Laundry appliances, such as washers and dryers
• Water heaters
• Ductwork
• Garage door openers
Coverage will vary by plan and provider, so be sure to read the warranty carefully.
What doesn’t a home warranty cover?
A home warranty doesn’t cover everything. Most home warranties have a list of exclusions that are not covered under the policy.
Some common exclusions include:
• Pre-existing conditions.
• Cosmetic defects.
• Improper maintenance.
• Code violations.
• Acts of nature.
• Appliances or systems that are not included in the warranty.
For example, if you have a home warranty that covers your heating and cooling system, and it breaks down because of a pre-existing condition, it may not be covered.
If you have a home warranty that covers your heating and cooling system, and it breaks down because of improper maintenance, it may not be covered.
If you have a home warranty that covers your heating and cooling system, but not your electrical system, and your electrical system breaks down, it may not be covered.
How much does a home warranty cost?
The cost of a home warranty varies depending on the coverage and location. In general, you can expect to pay between $300 and $600 per year for a home warranty.
In addition to the annual premium, you’ll also have to pay a service fee each time you request service. Service fees typically range from $75 to $125.
What’s the average cost of a home warranty?
The cost of a home warranty can vary widely based on where you live and what type of property you have. On average, a home warranty will cost between $300 and $900 per year, but can be more expensive in some cases.
In general, a home warranty for a single-family home will cost between $300 and $600 per year. For a condo or townhouse, the average cost is between $250 and $500. Finally, for a new construction home, a home warranty will cost between $200 and $500.
How much does a home warranty save you?
The cost of a home warranty can vary depending on the size of the home, location, and the amount of coverage you choose.
Most home warranties will cost between $350 and $600 annually. If you’re buying a home, you can ask the seller to pay for the first year of your home warranty.
If you have a home warranty, you’ll save money on the cost of repairs and replacement of appliances and systems in your home.
Instead of paying the full cost of a repair, you’ll only pay a service fee, which usually ranges between $75 and $125. The home warranty company will cover the rest of the cost.
How do you choose a home warranty?
Choosing a home warranty is like choosing a homeowners insurance policy or an auto warranty.
You want to make sure you are getting the coverage you need, and you also want to make sure you are not overpaying for things you don’t need.
When choosing a home warranty, the first thing you need to do is make sure you understand what is and is not covered by your homeowners insurance. You do not want to pay for coverage you already have.
Second, you need to make sure you understand what is and is not covered by the home warranty. You do not want to buy a home warranty and then find out that the things you need covered are not included.
Third, you need to make sure you are working with a reputable home warranty company. You can do that by checking out online reviews and by asking for references.
Are home warranties worth it?
The answer to this question is different for everyone. Some people are happy to pay a small fee to avoid the possibility of having to make a large repair or replacement to a major home system or appliance.
Others may not see the value in a home warranty if they have a new home or if they have a well-funded emergency home repair fund.
However, it’s worth noting that home warranties are not a one-size-fits-all product. There are many different home warranty companies, and the coverage and cost of a home warranty can vary significantly.
So, while a home warranty may not be worth it for some homeowners, it could be a great investment for others.
Conclusion
Home warranties can be a great choice for some homeowners, but not all. If you’re considering a home warranty, be sure to do your research.
Read the fine print, research the company, and take the time to calculate the cost to determine if a home warranty is right for you.
