In today’s economy, saving money on every household expense is a priority for many people. A home warranty may help homeowners save money on repairs and deductibles that would otherwise have to be paid out of pocket. So, is it a good idea to invest in home warranties?
What is a home warranty, anyway?
A home warranty is an insurance policy that, for a fee or monthly premium, covers repairs on major appliances and systems in the home. Many are transferable should you sell your house. The warranty may also cover certain aspects of plumbing work.
Why would I need one?
Risk management is needed when there are expensive problems with your heating system, air conditioning unit, water heater, or any other vital appliance within the first few years of living in a new home. You should make home warranty plans on time, so you don’t have to worry later on.
While it’s possible to pay to have these things repaired by a service company without having a plan in place, homeowners often wind up paying more out of pocket than if they had simply purchased standard coverage ahead of time. Some companies even require installing an appliance before it will issue a home warranty.
How much does it cost?
The cost of a home warranty varies widely depending on the type of plan, the location, and the specific appliances included in the coverage. Basic plans can begin at $300 per year, while comprehensive protection for multiple systems in your home may exceed $1,500 annually.
The price is usually determined by the age and condition of roofing and/ or heating system components, as well as any pre-existing conditions that exist in your plumbing systems, such as leaks and blockages. For this reason, it’s important to be thorough when filling out an application for a new plan with an insurer in order to get the best rates possible.
What kind of coverage do I receive?
In general, a home warranty covers air conditioning and heating units that break down. It also includes appliances such as dishwashers and clothes dryers that might not be covered by your homeowner’s insurance policy. Some protection plans will cover plumbing, including water heaters and septic systems. So-called “lifestyle” items may also be covered by some policies, such as an indoor hot tub or pool.
What’s the catch?
Home warranties typically only last for a few years before they need to be renewed with another contract from the insurer. When coverage runs out, homeowners will have to either renew their plan at the standard rate or risk repairing any future problems on their own dime. Also, many companies require that you have the most up-to-date model of certain appliances in order to receive coverage. But, a home warranty is still a really good and beneficial thing.
The best thing that you can do is really to get a home warranty. It will save you so much in the long run. Others didn’t really think it was a good idea to invest in a home warranty, but when their appliances break, they wish they did have one. Get one on time, so you don’t have to worry.