What is a Home Warranty & How Do They Work?
A home warranty is a service contract that covers different kinds of repair for appliances and systems in your home that break down from eventual wear and tear.
20/05/2021
If you’re thinking of getting a home
warranty, then give yourself a pat on the back.
A home warranty is a service contract that
covers different kinds of repair for appliances
and systems in your home that break down from
eventual wear and tear. Of course, there are
different home warranties in the market, and
each of them offer different levels of coverage.
Cheaper home warranties cover the
essential repairs and maintenance ranging from a
few items or appliances while the more expensive
ones can take care of several systems like your
HVAC system, plumbing, etc. Sometimes, they even
throw in a few more extras like taking care of
your garage doors and even your workshop if you
have one.
Depending on the amount of
money you put in for the warranty, the service
can do this all and more. However, that’s just
the gist of it. Let’s talk first about what is a
home warranty.
What is a home warranty?
A home warranty is a convenient consumer
product that you can buy that lets you mitigate
any expenses out of your pocket for handling any
repairs or maintenance expenses for your
appliances and home systems. If you are
wondering about the difference between home
insurance and a home warranty, take note that
home insurance covers expenses in the case of
fire, theft, wind, hail, and even vandalism.
It also covers any
medical expenses if
you’re unlucky enough to have a guest injured
when they stay over. In contrast, a home
warranty covers any repairs and needed
maintenance for any appliance and home systems
that malfunction that aren’t covered by your
homeowner’s insurance.
Also, it’s a lot
easier to get a home warranty than home
insurance, not to mention that your real estate
agent could choose to recommend a good home
warranty company to seal the deal with a house
sold.
So how does it work?
If an issue arises from any of your appliance
or home systems that are named in your home
warranty contract, you can submit a service
request to the company you bought the home
warranty from, and they will send in a
contractor to diagnose, maintain, repair, or
even replace the appliance or system if needed.
You will then pay a specific fee that is usually
between $30 to $125, depending on the company.
The company can then decide to replace
the appliance or system with a comparable
alternative or choose to provide you with a cash
settlement so you can buy it yourself. Although,
as mentioned earlier, the appliance or home
system should be included in the contract, or
they won’t provide any service at all.
Some warranties cover all appliances, and some
cover extensive home systems like air
conditioning, plumbing, etc. More comprehensive
but more expensive warranties cover both. Some
warranties even give you some more add-ons like
taking care of your septic tank, well pump, etc.
FAQ
Is it okay for me to buy multiple home warranties?
No, not ever. You see, most companies offer
different levels of coverage ranging from just
your appliances to all of your appliances and
home systems. They usually go from basic
warranties to premium warranties, of which the
prices will depend on what type of coverage you
want to pick which can range to a few thousand
dollars to a
coverage limit of up to $10,000.
For example, you may want to have some
protection for your swimming pool or second TV,
which are items not commonly covered in
warranties. Some home warranty companies offer
this level of coverage, especially in their
premium services.
Will every home appliance be covered?
We’re also going to say no on this one. As mentioned earlier, a lot of items can be covered by home warranties, but not all of them. Thus, you can only ask for service for those named items stated in the contract.
Do I need to buy both homeowner’s insurance and a home warranty?
Homeowner’s insurance is mandatory, especially if you’re paying a mortgage. On the other hand, a home warranty is entirely optional. However, having both will provide you greater financial security and financial coverage for your home. Not only that but if you have an older home with old home systems and appliances but don’t have the money to replace them all, having a home warranty is a good way to keep you from spending too much money from your own pocket.
Should you buy a home warranty?
If you’re big on saving money and want financial protection from spending big on appliances and your home systems, then you should buy a home warranty. It’s a cheap and reliable alternative especially if your manufacturers don’t offer repairs and maintenance anymore. Home warranties also take care of finding a contractor to see your appliances or home systems instead of finding them yourself, which is a great convenience.
To Conclude
If your home has a lot of old appliances and
a home system, but you’re not ready to replace
them just yet but are also afraid of them
breaking down any time soon, then having a home
warranty taking care of them is optimal.
They are cheaper, and they do the work of
finding a good contractor for you to check out
the things you need service with. Home
warranties may be optional, but they are a good
addition to your financial security along with
your home insurance.