What are Home Warranties?
Saturday Nov 18th, 2023
Home warranties are becoming more and more popular among homeowners, particularly those who have recently purchased a home or those who are planning to sell their home. A home warranty is a type of service contract that covers the cost of repairs or replacements for certain systems and appliances in your home. In this article, we will explore what home warranties are and how they work, as well as some of the pros and cons of purchasing a home warranty.
What is a Home Warranty?
A home warranty is a contract between a homeowner and a warranty company that covers the cost of repairing or replacing certain systems and appliances in the home. Unlike homeowners insurance, which covers damage to the home caused by natural disasters or other unexpected events, a home warranty covers the cost of repairs or replacements for appliances and systems that break down due to normal wear and tear. Examples of items that may be covered under a home warranty include:
- Heating, ventilation, and air conditioning (HVAC) systems
- Electrical systems
- Plumbing systems
- Kitchen appliances, such as refrigerators, dishwashers, and ovens
- Washing machines and dryers
How Does a Home Warranty Work?
When a covered appliance or system breaks down, the homeowner contacts the warranty company to file a claim. The warranty company will then send a service provider to the home to assess the issue and determine whether it is covered under the warranty. If the issue is covered, the service provider will repair or replace the appliance or system at no additional cost to the homeowner, aside from a small service fee or deductible.
It's important to note that not all issues will be covered under a home warranty, and coverage can vary depending on the specific warranty plan. Homeowners should carefully review the terms of their warranty before purchasing to ensure they understand what is covered and what is not.
Pros and Cons of a Home Warranty
There are several benefits to purchasing a home warranty, including:
- Peace of mind knowing that certain systems and appliances are covered
- Protection against unexpected repair or replacement costs
- Convenient access to service providers
However, there are also some drawbacks to consider when deciding whether to purchase a home warranty:
- Cost - home warranties can be expensive, with annual premiums ranging from $300 to $600 or more
- Limitations on coverage - not all issues will be covered under a home warranty, and some plans may have specific exclusions or limitations
- Service providers - homeowners may not have control over which service provider is sent to their home, and some providers may not be reputable or reliable
Home warranties can be a valuable investment for homeowners who want peace of mind and protection against unexpected repair or replacement costs. However, it's important to carefully review the terms of a warranty before purchasing to ensure that it provides adequate coverage and value for the cost. By understanding how home warranties work and weighing the pros and cons, homeowners can make an informed decision about whether a home warranty is right for them.