When you consider buying a home warranty for your property, you undoubtedly have several questions that go through your mind.
To ensure that you get the most out of your home warranty as a homeowner or an investor, we have included throughout this article a list of the most frequently asked questions and their answers. Keep reading if you want to learn more about home warranties.
What Is a Home Warranty?
A home warranty is a kind of service contract that will pay for the repair and/or replacement of components of your home’s systems and appliances that break down as a result of regular wear and tear.
This may include components like air conditioners, water heaters, electrical systems, and more.
What Is Included in a Home Warranty?
Home warranties protect your home’s most vital components, such as its systems and appliances. Many service companies provide an electrical system, heating and air conditioning system, and household appliance protection.
When committing to the conditions of a home warranty contract with a third-party service provider, consider which components of your house need the most protection.
Begin with the systems and appliances that are used the most. Take into account the cost of replacement as well. Purchase a home warranty if the cost of repairing a major appliance or system will surpass the cost of the coverage.
What Does a Home Warranty Not Cover?
When a homeowner buys a home warranty plan after a damaged part of a system or appliance in the home, the plan does not cover the cost of repairing or replacing the affected component.
This is often why home warranty companies make it a requirement that you show them a report from a home inspection before you can buy a plan.
If an item was on the house inspection plan but wasn’t fixed or replaced before the home warranty coverage started, it can’t be fixed or replaced with the money from the home warranty.
As a result, homeowners should never move into a new house before addressing any defects mentioned in the home inspection report for that property.
What is the Difference between Home Warranties and House Insurance?
The mortgage lender often requires homeowner’s insurance as a safety measure for the lender’s investment in the borrower’s house. House warranties, on the other hand, are not necessary, and the homeowner in question has the option of obtaining one or not.
Home warranties will protect your valuables individually. Your homeowner’s insurance will protect your home in more ways than one (in case of accidents or disasters).
In a nutshell, you would not claim with your homeowner’s insurance provider for a damaged refrigerator. Similarly, if your home was flooded, you would most likely not depend on the home warranty coverage you had acquired.
If you buy a home warranty, it’s probably because you expect an appliance or device in your home to break down or need repair shortly. On the other hand, obtaining homeowner’s insurance prepares you for unplanned events such as harsh weather or a busted pipe.
How Can a Home Warranty Help?
If you have a home warranty, you may not have to pay large amounts of money for repairs that you didn’t expect to need. That ensures that you won’t have any concerns.
Home warranty coverage may be a useful tool for people on a low income. A home warranty may provide financial security for homeowners who do not have an emergency fund or who want to retain the emergency fund they do have.
Individuals who aren’t handy, don’t have the requisite skills, or just don’t have the time to repair a broken home system or appliance may benefit from acquiring a home warranty.
What Is the Cost of a Home Warranty?
According to a recent Consumer Affairs study, the cost of a conventional home warranty service contract may vary dramatically depending on where you live and the quantity of coverage that you want.
The yearly cost of the programs normally runs between $300 and $600, and consumers are often paid in monthly installments.
Each time you file a claim that requires your warranty provider to send a contracted technician to your home, you will be charged a trade service call fee in addition to the cost of the plan.
A service call fee is often paid to the service professional and may vary from $50 to $100 per visit. This cost is comparable to an insurance deductible. Many service call firms will not charge an additional fee even if a single repair needs more than one visit to complete.