When purchasing a new home, a top consideration that many prospective homeowners overlook is the home warranty that can be included with the sale of the home or purchased soon thereafter. A home warranty is a kind of service contract that will pay for the costs associated with the replacement or repairs of any items that are covered by the warranty. These items can include everything from the plumbing system to the heating and cooling system. Some other items and appliances that are covered with a home warranty include electrical systems and certain kitchen appliances. However, it’s important to understand that doors, windows, and structural features aren’t covered with a home warranty.
When searching for the right home warranty, it’s possible to select a Total Protect home warranty, of which there are three separate options available to you. While a standard home warranty only provides limited coverage, the home warranty options from Total Protect include an appliances plan, a systems plan, and a combo plan. The combo plan will cover major systems like water heaters and interior plumbing while also providing coverage for kitchen appliances like refrigerators and dishwashers. These warranties are designed to provide coverage for an extended period of time.
When you are purchasing a home, a standard home warranty can be very useful. Not having a warranty in place could cause you to spend thousands of dollars to replace a major appliance or system in your home. If the HVAC system on your property is damaged a couple weeks after you move into the home, you may be required to spend a significant sum of money almost immediately after making one of the largest investments in your life. This article takes a look at the pros and cons of home warranties as well as the costs associated with a warranty, which should help you determine if a Total Protect home warranty is right for you.
- When purchasing a new home you may want to consider getting a home warranty to pay for any repairs or replacements on items.
- These warranties typically last a full year and range in price but can save you money overall if many damage issues arise in your home.
- Our article discusses the pros and cons of home warranties and whether one might be right for you!
Are Home Warranties Worth It?
When you’re searching for the best home warranty at the right price, keep in mind that home warranties typically cost around $350-$650 per year. These costs can be higher in the event that you decide to cover extras like septic systems, pools, and dryers. While contracts for home warranties can differ, the costs associated with a service call can be anywhere from $25-$125.
It’s also important to note that costs for a home warranty differ depending on the type of property you purchase. When you rent an apartment unit, you shouldn’t need to purchase a home warranty. On the other hand, a home warranty may be necessary when buying a condo or duplex. In this situation, the costs for a home warranty may be slightly higher when compared to the costs for a warranty on a single-family detached home.
Home warranties last for a year after the date of purchase. Once the year has passed, you can choose to renew the warranty for further coverage. As mentioned previously, service call fees are a major part of a home warranty and will occur whenever a professional needs to assess the damage to an appliance or system in your home. Try to find a home warranty provider with low service fees if you want to keep costs down.
Pros Of a Home Warranty
There are several tangible benefits that come with purchasing a home warranty for your property, the primary of which is that it should give you peace of mind when buying the home that you’re interested in. If the home consists of older systems and used appliances, having a home warranty on hand means that you don’t need to worry about a system failing or malfunctioning immediately after you move into your new home.
It’s also important to understand that the home warranty provider takes care of locating and eventually hiring a reputable service technician, which allows you to avoid the hassle of searching for a technician on your own. If you don’t have the skills necessary to complete do-it-yourself repairs, a home warranty gives you the ability to have the appliance of system repaired with just one phone call.
Cons Of a Home Warranty
While purchasing a home warranty is beneficial for many homeowners, there are some negative aspects of a warranty that you should be aware of before going ahead with this purchase. The main cons of a home warranty include:
- How do the companies impose repair limits on a yearly basis?
- What do they say about the maintenance of your appliances?
- Where do the companies “get you”?
Make sure that you know the exact systems and appliances that are covered by the home warranty you’re considering purchasing. It’s common for certain appliances to be left off, which could be a shock if you don’t read every detail of the contract. Many home warranty companies will impose limits per year or per repair, which means that only a certain amount of coverage may be provided. These limits are usually set at specific dollar amounts. If the limit per year is $3,000 in repairs, you may be tasked with spending a substantial amount of your own money if two major systems or appliances malfunction in the same year.
It’s also very important that you understand when and how claims can be denied. Just like many car manufacturer warranties, coverage is only provided in the event that you properly maintain the appliance in question. Records of maintenance will need to be given to the service professional if you want your claim to be granted. However, these records may be difficult to obtain if the system or appliance malfunction occurs right after you move into the home. Certain home warranty providers will state that the appliance was improperly maintained to avoid providing coverage and to dispute the claim that you file.
When the home warranty company looks at the damaged appliance or system, they will be tasked with deciding if the system should be repaired or replaced altogether, which can be frustrating if you want to have input in this decision. When a replacement is made, it’s also possible that you won’t be able to select the new system. There are also specific situations wherein a damaged system or appliance won’t be covered even though it’s listed in the warranty.
For instance, in the event of a power surge that damages a covered appliance, this appliance would no longer be covered. It’s these small exceptions and strict guidelines that allow many home warranty companies to avoid paying the amount of money that they should. While the costs associated with a home warranty may seem low, there’s a reason for that.
Final Thoughts on Home Warranties
Figuring out if a home warranty is right for you is necessary before you make this kind of purchase. When purchasing a home that has been previously owned by someone, a home warranty might be a good idea. In the event that the home inspection finds that a few of the systems and appliances in the home are getting towards the end of their life-cycles, having a home warranty in your possession can help you avoid the headache that comes with having to repair a malfunctioning system soon after moving in.
If you decide to purchase a home warranty, make sure that you select one from a reputable company with great online reviews. It’s also important that you understand the complete terms and conditions of the warranty before making the purchase. You should know what the warranty covers as well as the exact length of the warranty in question. Some sellers will automatically offer home warranties in order to make their home more appealing, which eliminates the risk that comes with getting a home warranty.
There are also times when you should avoid getting a home warranty. If the home that you’re purchasing is newly constructed, the builder will typically give you a warranty that covers the work and materials that were provided by them. These warranties can include coverage for electrical systems, plumbing systems, and HVAC systems. They also last for anywhere from 2-10 years, which is why a standard home warranty would be unnecessary in this situation.
While the home appliances for a newly constructed property won’t be covered by a builder warranty, these appliances are likely new as well, which means that you should have a manufacturer’s warranty. If you purchase a new appliance with your credit card, keep in mind that certain credit cards provide extended warranties that are added to the manufacturer’s warranty.
If you’re wondering if home warranties are worth the hassle, the answer is that it depends on the situation you’re in. When the seller provides a home warranty before purchase, you can benefit from the warranty without paying for it yourself. On the other hand, these warranties are unable to protect against all of the hidden costs and risks that you face as a new homeowner. Before purchasing a warranty, read every detail within the paperwork to make sure that your investment will pay off.