The benefits and drawbacks of a home warranty
If you’re considering purchasing a home warranty, you should take the time to research everything about it – how a home warranty works, how much it costs, leading home warranty companies, and more. The first thing you should determine is whether a home warranty is worth the investment for you. While it offers generous coverage and protection, a home warranty has its fair share of drawbacks that you should be aware of before purchasing.
What is a home warranty?
A home warranty provides coverage against mechanical breakdowns of your home systems and appliances. It can extend peace of mind to you as you don’t have to worry about any emergency repairs or expensive payments. Home warranties are designed to cater to the needs of homeowners, homebuyers and sellers, and real estate agents.
Home warranty policies are service agreements where you, a homeowner, pay a monthly or annual premium payment to get coverage for your home’s appliances and systems. These items get repaired or replaced during the coverage term when they break down due to general wear and tear.
How does a home warranty work?
Home warranty coverage generally kicks in after 30 days. After this period, you can file a claim with your home warranty company whenever a covered item breaks down. You can either file your claim online or contact customer support.
The home warranty company sends a service technician to diagnose and repair the problem. You’d have to pay a small trade call fee to the technician for their service. The company will cover the cost of the repair including parts.
Benefits of home warranty plans
Helps you save – Some appliances and systems are susceptible to breaking down more frequently than others. A major repair or replacement for even one item can wipe out your savings. Home warranties cover multiple items and can help you save thousands of dollars.
Adds value to the home – Home warranties can be of great benefit to parties involved in a real estate transaction. A home warranty is advantageous to both home buyers and sellers. Homebuyers prefer a protection plan in place after investing a huge amount in buying a home, and sellers can make a quick and profitable sale. Real estate agents also add home warranties to home sales to incentivize buyers.
Access to skilled technicians – It is hard to search and enlist experienced and skilled professionals, and it can be especially bothersome to do so during emergencies. On the other hand, home warranties have a vast network of local contractors who are qualified, and vetted to resolve your household repairs.
Drawbacks of home warranty plans
Policy exclusions – Home warranties only provide coverage to items that break down due to general wear and tear. They will not offer repair and replacement services to items that malfunction because of improper maintenance, willful neglect, and other factors.
Limited control – You won’t be able to choose between repairing or replacing your covered items; home warranty companies control all these decisions. You will not get to decide the brand, color, or other aspects of your replacement item. You may just get a functional equivalent or a prorated amount of money in lieu of replacement.
Specific coverage – Home warranty plans are selective in their coverage and only cover specific components or parts of your items. If a covered item breaks down due to an uncovered part’s failure, it won’t be eligible for coverage.
Should you get a home warranty?
Home warranty coverage can protect your home and budget. You can invest in a home warranty policy when you are worried about the state of your home’s aging appliances and systems. Despite its shortcomings, home warranties can help you avoid spending thousands of dollars on a one-off repair or replacement. You don’t need to worry about the quality of service as the repair and replacement service you get is also of a licensed and professional standard.
If you are still unsure about a home warranty’s worth, you can extend your home warranty research and read customer and expert reviews to form an informed opinion.