When you buy a home with a mortgage, you must carry insurance on that home. But don’t confuse homeowner’s insurance with a home warranty.
Homeowner’s insurance will cover damages to your home from disasters like fire or earthquake, as well as loss from theft.
A home warranty is a service contract that covers the cost of the repair or replacement of systems and appliances within your home, such as your plumbing, air conditioning, or your oven. Home warranties are optional, and there are many different kinds, with different types of coverage.
To sort through these options, see our definitive guide below.
Types of Home Warranties
Basic home warranties, or “home service agreements,” come in three major types:
- System plans cover air conditioning, heating, ductwork, electrical and plumbing
- Appliance plans cover items like a refrigerator, dishwasher, range, and washer/dryer
- Combination plans cover both the above, often allowing you to choose which items to include
Many warranties, like those offered by this company, provide optional coverage for items like your pool, or even your home computers.
Be aware that a home warranty plan differs from single-appliance warranties, which only cover one appliance for a short time. It’s also different from a Builder’s Warranty, which covers a new home’s workmanship, materials, and major systems, but NOT appliances.
When considering home warranties, decide ahead-of-time what items are most important to have covered, and then compare the costs for that coverage.
How Do Home Warranties Work?
Get a home warranty that fits your particular situation, choosing the coverages that you actually need. Make sure you are aware of what is NOT covered under any warranty you consider.
Your warranty will last anywhere from 1-3 years, and you will need to renew it or buy another to keep things up-to-date.
When something under warranty breaks down, call your warranty provider, and they will secure a repair or replacement for you with repair companies they partner with. Be aware that most warranty providers will charge a service fee to do this, which is considered an out-of-pocket cost to you.
Read more about: Homeowners Insurance
Benefits of Home Warranties
A home warranty’s primary selling point is peace-of-mind.
If your home and it’s contents are older, a warranty is invaluable, since the general cost of individual system and appliance repairs can be high. A reputable home warranty company will get your needed repairs done quickly and with little hassle for you.
You can transfer your home warranty to potential buyers of your home as part of a sales contract. This is often a very attractive feature to buyers.
Finally, if you are not comfortable with DYI repairs, a home warranty is the right answer. With it, you can delegate that part of home maintenance to someone with more experience.
Home Warranties Help You Maintain Your Investment
Your home is the biggest purchase you may make in your lifetime. Keep your investment protected with one of many helpful home warranties, so you can enjoy your home for years to come.
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