Home warranties typically cover the repair or replacement of home systems and appliances, but the specific appliances covered may vary from one company to another. Before diving into which systems a home warranty covers, it is essential to understand what a home warranty is, what it is not, and when items are covered. Keep reading for more information.
What is a Home Warranty?
Homeowners purchase a home warranty for coverage for your appliances. A home warranty is usually purchased by the year and paid in monthly installments. The annual fee can vary from $440 to $550. When a home system or an appliance breaks down, the homeowner calls the warranty company. The home warranty provider contacts a contractor to come to the home for a service call. Homeowners pay a co-pay for the service call, which is usually between $75 and $125. The contractor will either fix the problem or discuss the options for replacing the item. There are replacement limits on some of the more expensive items.
A home warranty should not be confused with homeowner’s insurance. Mortgage companies require homeowner’s insurance, and it covers property both in and outside of the home damaged due to disasters such as fire, hail, wind, and theft. Homeowner’s insurance does not cover the breakdown of appliances as they age or normal wear and tear. Those items are generally covered by a home warranty.
What is Covered?
Typically, a home warranty covers a home’s central air conditioning, central heating, water heater, water softener, garbage disposal, faucets and toilets, ceiling fans, garage door openers, plumbing, and electrical systems. Warranties also typically cover the refrigerator, dishwasher, washer, dryer, range, cooktop, oven, microwave, and trash compactor.
What isn’t Covered?
A home warranty covers breakdowns caused by normal wear and tear. If the appliances or systems aren’t taken care of, or if they are purposely abused, the home warranty may not apply. For example, if an electrical system is consistently overloaded, the home warranty may not cover breakdowns. Home warranties do not cover accidents and acts of God that cause breakdowns. In these cases, such as fire, hail, or wind, the homeowner’s insurance should cover the damage. A home warranty also will not cover systems that were not working before coverage began. The system must be in good working order before buying coverage.
Benefits of a Home Warranty
There are many benefits of purchasing a home warranty. First, a warranty acts as an added protection for homeowners and reduces the out-of-pocket expenses they will need to pay for repairs or replacement appliances. Homeowners pay less to keep warranty coverage than they would spend for various repairs, new appliances, and service calls.
A home warranty also provides quick and easy access to contractors. These contractors are pre-screened and approved by the home warranty companies. This is especially helpful for homeowners living in a new area who do not know who to call. When buying a home, a home warranty reduces the risk of discovering repair concerns that were not detected during the home inspection. Sellers do not have to worry about being responsible repairs following the sale of a home.
Home warranties often offer comprehensive home warranty plans that will meet the needs of all parts of a home, including pools, septic tanks, well pumps, and appliances. Perhaps the best benefit of all is the peace of mind that comes with a home warranty. Homeowners no longer need to worry about unexpected costs, and this is especially helpful in today’s economy.
A home warranty can be a good investment for many homeowners. Do some research to find the best coverage and plan for your home.