Do You Really Need a Home Warranty?

Do You Really Need a Home Warranty?- Home Warranty sounds like a fantastic idea, but is it something you really need? It can be difficult to make the decision. Check out these facts to help make the decision that is right for you.

First, it is important to know what a home warranty is. It is not the same as homeowners insurance (you definetly need that!). A home warranty is a contract that provides discounted repairs and replacements on the home’s major components such as air conditioning, plumbing, and electric. There could also be options for large appliances or swimming pools. If something needs repaired, the homeowner contacts the warranty company. If the item is covered the company sends someone to repair that item and all the homeowner must pay is a service fee (plus what has already been paid for the warranty).
Costs & Coverage
– It costs a few hundred dollars a year (typically around $350), paid up front, or possibly in payments. The cost depends on the type of home, but typically not the size or age.
– Separate structures may not be covered unless an additional fee is paid.
– The service fee is normally around $60 each time a technician comes to evaluate the claim.
– If an issue requires multiple contractors the homeowner may have to pay multiple service fees.
– Some areas may not be covered because protection was not purchased for that area or if an item was not properly cared for.

– If the company denies a claim the homeowner will still have to pay the service fee, and pay for the repairs themselves.
Who it Can be Great For
– Those who do not have an emergency fund for repairs, or who do to wish to tap into their fund.
– People who are not handy or who don’t want to deal with the hassle of finding a contractor on their own.
– Homeowners with expensive appliances.
– Added reassurance for buyers who aren’t sure how well the home has been mainatained.
– It can be great for someone with depleted savings or someone who is not comfortable with the possibilites of unplanned for and expensive repairs
– It can be a great add-on to offer a homebuyer a paid one-year home warranty with the purchase as a measure of protection against buyer complaints.
Some Drawbacks
– Even if a homeowner purchases a home where the previous owner did not care for an item, such as the furnace, the warranty company may not cover it in repairs, regardless of what the new owner has done to care for it.
– Homeowners and warranty companies may disagree on what constitutes proper maintenance on an item.
– If the homeowner does not have to make a claim they may feel like it is a waste of money.
– Some repairs may be less than the warranty and service fee costs.
– There is no freedom to hire your own contractor.

A home warranty can be a great option for many types of buyers. While there are some drawbacks, it can make sense for many people. The added peace of mind it provides is often very valuable. It is important to consider all aspects of home warranties, including drawbacks, when making the decision for a home warranty. If you are a homeowner that is knowledgeable about home repairs (or perhaps has a very handy friend or family member) a warranty may not be the best fit for you. Consider your options, but remember that warranties do not replace homeowners insurance!