If your washing machine breaks down in the middle of doing a load of laundry, who do you call? The best person to call is your home warranty company. Home warranty companies take care of the repairs of any broken down equipment in your home, saving you a lot of money on repairs.
Buying a home for the first time will have you spending a whole lot of money. Some of these costs are expected, e.g., the mortgage costs or down payment. However, there are other unexpected cost such as property taxes and the cost of unexpected repairs in the home. Homeowners can always avoid paying for repairs and replacement of appliances if they sign up with a home warranty provider.
What is a home warranty?
What is home warranty – A home warranty takes care of the costs to fix or change your home appliances when they are broken down. Home warranty companies typically offer annual contracts. The way the deal works is that whenever you have an issue with the appliances in your home, you can get in touch with your home warranty provider who’ll send someone over to work on your appliance.
This repair typically costs nothing since you must have already paid the annual amount stipulated by your home warranty company. However, for each claim raised, you will pay a fee for the service call, the amount paid for this would be specified in your contract. Home warranties only covers repairs specified in the contract. These contracts typically come without restrictions and limits to the amount that could be paid out. Before signing a deal with a home warranty provider, it is important to read the agreement carefully to ensure you’re getting a great deal.
When done properly, home warranties take care of the repairs on your homes systems and appliances. It covers all the costs from appliance servicing due to wear and tear to bigger appliance and system repairs around the house. The level of service you get from your home warranty provider, depends on the type of contract signed with them. Sometimes, you can buy a home warranty alongside with your home when buying a home. Other times, it could be purchased in an already-existing home.
What Does a Home Warranty Cover?
Having a home warranty allows you to invest in cool luxury gadgets for your home without overthinking it. This is because many home gadgets are covered in a home warranty plan. The following are typically covered in a home warranty:
Appliances: This includes ovens, ranges, refrigerators, dishwashers, garbage disposal systems, air conditioning systems etc.
Systems: This basically refers to the homes electrical system and the HVAC system which includes the heating, ventilation, ductwork, hot water, furnace and plumbing.
When signing up for a home warranty, always take a careful look the contract to see the appliances covered because not all of them are. Some appliances which you might expect to be covered, may not be on the list. In such cases, you may have to add those appliances to your plan.
Also note that some home warranty companies offer very robust coverages to include almost every appliance in the home such as two or more of the same appliance (e.g. two refrigerators), pool equipment, spa equipment, ice-makers, pest-control etc.
Is a Home Warranty the Same as Homeowners Insurance?
I already have homeowners insurance, why do I need a home warranty? This is a question many people ask. A home warranty differs considerably from a homeowner’s insurance.
The main difference is that these two coverages take care of two totally different aspects of the home. A home warranty covers the replacement and repair of systems and important appliances around the house when they’re broken down. An example is a broken dishwasher or oven. Homeowners insurance on the other hand takes care of any loss or damage incurred due to a damage in your home’s structure caused by unexpected events such as fires, earthquakes, theft, vandalism, and liability that could occur as a result of accidents in the home.
Further more, many banks and mortgage lenders would require you show your proof of homeowners insurance before approving you for a mortgage, however a home warranty is optional.
The only similarities between a home warranty and a homeowners insurance is that the providers of both services, typically offer various types of plans, allowing homeowners to choose which ever one is most suitable for their situation. Also, for both services, the level of coverage provided is usually determined by the cost of the package chosen.