Home warranties are designed to help homeowners deal with the costs that come with unexpected home repairs. These warranties go beyond the coverage of homeowner's insurance, covering properly maintained systems and appliances that fail due to routine wear and tear.
Home Warranties - How They Work
A home warranty generally costs between $300 and $600 a year. Any repairs required require a low flat service call fee, even though the actual cost of repairs can cost hundreds or thousands of dollars for the repair. Homeowners can simply contact the warranty company to file a claim when a covered system or appliance breaks down. The company sends a service technician to replace or repair the equipment.
The Pros of Home Warranties
Home warranties are popular because they offer homeowners peace of mind. If you're considering the purchase of a home warranty, here are a few of the pros to consider.
- Pro #1 - Easily Take Care of Repairs - Home warranties make it easy to take care of needed repairs. Instead of trying to find a reputable repair company, homeowners just contact the insurance company. Claims can be submitted 24/7/365, ensuring that homeowners don't need to wait for normal business hours to get the process started.
- Pro #2 - Avoid Debt for Big Home Repair Expenses - Broken air conditioning systems or the breakdown of a major appliance can cost hundreds or thousands of dollars. Without a home warranty, these major expenses could be financially devastating. Instead of going into debt for home repair expenses, the home warranty allows homeowners to have repairs completed for a low flat rate.
- Pro #3 - Warranties are Inexpensive - Many homeowners are surprised to find that home warranties are inexpensive, and they can pay for themselves in just one call. Most warranties only cost between $300 and $600. If just one appliance needs replaced, the warranty will pay for itself. In some cases, home warranties may be free, since it's very common for sellers to add a home warranty with the home to attract homebuyers.
- Pro #4 - Flat Fees for Service Calls - With your home warranty, you'll only pay the flat rate for a service call, no matter how much the repair or replacement of the system or appliance costs. Many home repair companies charge over $100 for a simple service call, not including the cost of repairs or replacement.
- Pro #5 - Multiple Plans Available - Multiple home warranty plans are available, allowing you to choose the plan that best meets your need. You can choose a basic plan that covers major appliances and home systems, or you can add optional coverage for other items, such as pools or septic systems.
- Pro #6 - Peace of Mind - The main pro of having a home warranty is the peace of mind it offers. With a home warranty, a broken HVAC system or a malfunctioning washing machine won't turn into a crisis.
The Cons of Home Warranties
Home warranties offer many benefits, but you cannot just purchase coverage and fail to maintain your home. Here's a look at a few of the cons to consider before purchasing a home warranty.
- Con #1 - It May Be Unneeded - If you're purchasing a new home, you may not make any claims. Some homeowners may feel like they wasted their money on a policy, although the policy still offers peace of mind.
- Con #2 - Preexisting Problems Won't Be Fixed - Any problems that are preexisting, such as broken fixtures or poorly maintained systems, won't be fixed. In many cases, you'll need to show the insurance company your home inspection to prove that the items were already in good working order when the warranty was purchased.
- Con #3 - Some Systems Cost Extra - Basic home warranty programs may not cover all your important systems. It may cost you more to cover certain systems, such as a septic system or an air conditioning system. This means it's essential to find out what's covered before you purchase the warranty.
- Con #4 - You Don't Choose the Service Provider - Your home warranty company will choose repair companies, which means that you don't get to make the choice yourself.
- Con #5 - Careful Maintenance is Required - You'll need to take care of routine maintenance on your own. If you don't take care of proper maintenance, the warranty company may deny your claims.