Most responsible homeowners have worked out a budget that helps them to balance their living expenses with financial goals. By stashing the money you might otherwise spend frivolously, saving that money and buying a home warranty will help protect you against costly repairs.
Coverage for Appliances
Home warranties provide a variety of coverage for appliances that might break down. Unlike homeowners insurance, which only covers damage caused by disasters or accidents — such as a buckled floor after a leaking toilet — home warranty plans cover the cost of replacing and repairing certain household appliances. However, each plan has its own set of limitations and exclusions.
Most plans won’t include pool equipment, hot tubs and some free-standing appliances in the kitchen, for example. But they may cover maintenance items like filters, vents and baseboard casings, plumbing, and electrical systems. Some providers also charge a service call fee when they dispatch a technician to fix an appliance or system, which can add up. To determine which plan is best for your home, check with the company to see what they offer and whether they have sample contracts available online. They won’t reflect exactly what you’ll get in your final contract, but they can give you an idea of what to expect.
Coverage for Systems
Home warranties will cover many of the systems that keep your house functional and comfortable, such as plumbing, heating, electrical, air conditioning and water heaters. However, there are some limitations. For example, a warranty won’t usually cover issues resulting from normal wear and tear or that are caused by poor maintenance. You should carefully review your contract to determine what will and won’t be covered. Many home warranty providers offer sample contracts that you can review before you finalize your agreement. They may not accurately reflect the final contract but can give you a good idea of what to expect.
Coverage for Expensive Repairs
Home warranties offer protection against the high cost of unexpected repairs or replacements. However, offers can vary significantly by company, so it’s best to shop around to find a plan with a manageable monthly cost and service call fee and that covers the systems and appliances in your home.
According to the National Home Service Contract Association, most home warranty contracts exclude damage caused by natural disasters (that’s what homeowners insurance is for) and structural parts of the house like walls, doors and windows (that would be covered by a builder or seller’s warranty). They also typically don’t cover pre-existing conditions found during a home inspection or indicated in a seller’s disclosure.
A good way to gauge the coverage you’ll get with a home warranty is to contact companies for a customized quote. Most offer this online or over the phone. Most companies let you choose from four plans that protect the most common home systems and appliances, as well as add-ons.
Coverage for Unexpected Breakdowns
Unlike homeowner’s insurance that typically only covers damage caused by fire, severe weather or vandalism, home warranties provide coverage for the wear and tear of everyday usage of appliances and systems. When a breakdown occurs, you make one call to a home warranty provider and they send someone out to repair or replace the broken item. Depending on the plan you choose, limits may be set for certain items such as air conditioners, water heaters and garbage disposals. Look for transparent service agreements and customer support teams that can help walk you through the limits of each plan.
A home warranty can be a great benefit for those who want to avoid depleting their emergency fund or rescheduling their budget for costly repairs. Home warranties are also ideal for homeowners who aren’t handy or don’t feel comfortable trying to track down a repair person on their own. Some home buyers even negotiate with the seller to include a home warranty as part of the closing costs when buying a new home. This will enable complete home protection for you and provide peace of mind in a world that is already stressful.
