Top 5 Facts About Home Warranty


Purchasing a house is one of the most exciting things in life. However, it surely is the most expensive investment that one person can make. The whole process of buying a house comes with lots of responsibility. One of the biggest issues refers to protecting your new house. That is why having a home warranty is one of the top priorities when someone decides to take the step and buy a house.

In general, when someone is buying a house, there are several expenses that he can expect. Some of them include closing costs, down payment, moving fees, and others.

People know about these expenses so they are saving money to cover them on time.

Unfortunately, that is just a surface because there are many other unexpected expenses.

Usually, they come when some of the major systems and appliances in your house breaks, and you need to prepare big funds to repair them.

What Is A Home Warranty?


A home warranty is a service contract that covers all costs of repairing or replacing some of the critical appliances or systems in your home. For instance, if your electrical, plumbing, or air conditioning systems stop working as well as ventilation, water heater, or even some appliance such as washer, oven, or dryer, your home warranty will cover their repair costs.

All homeowners should know that a home warranty contract will depend on their own requirements and insurances because the insurance will cover the cost of damage made in the home. Despite these ones, the insurance also covers the cost of other stuff such as damages made to your property, thefts, claims, and lawsuits against your property and house. Even though homeowners insurance is required by lenders, that is not the case with home warranties. In fact, they are optional. Since home insurances and home warranties are not the same thing, we will analyze in further text all important facts that you need to know before hiring a home warranty company.

Moreover, we understand that finding a reliable home warranty company that will fit your personal requirements and needs can be a challenging task. There are so many of them on the market, so it is difficult to choose the one and, at the same time, be sure that you selected the one you can trust. In order to help you, we did the research and come up with a reputable and credible company that you can collaborate with without worrying about some potential risks and frauds. If you are interested, you can visit this page and see whether their services work for your demands.

A Home Warranty Is Not The Same As Homeowners Insurance


Since all first homeowners get confused about whether there is a difference between homeowners insurance and home warranties, we will first discuss that. The difference is very important to understand.

When it comes to the homeowner’s insurances, they cover accidental damages that happen in your house or are caused by some natural disaster or stolen. Therefore, a homeowners insurance policy will cover the personal interior and exterior of the property and general liabilities (if someone gets injured on your property). People should know that if they are purchasing a house with a mortgage, the homeowner’s insurance will be required.

On the other hand, when it comes to a home warranty, the contract will cover all costs of repairs and replacements of any system or appliance in the house. Also, the purchasing of a home warranty contract is not a requirement.

Home Warranty Costs, Service Fees, And Other Expenses


In the process of evaluating a home warranty contract, it is necessary for you to completely understand how much it will cost. This includes getting informed about initial costs, service fees, and other expenses.

In general, the exact price of your home warranty contract will depend on the coverage level you select. For instance, the usual amount can cost $200 for major appliances and $800 for covering different systems including electrical, plumbing, conditioning, etc.

When a person buys a home, he should know that the warranty contract is actually a part of the closing costs. That means that all parties can be included in the process of paying for the service. This is negotiable, however, payment can be shared between the buyer, seller, and realtor.

Some of the home warranty schemes have a deductible of about $100 or the repair cost.

Therefore, if your home warranty carries a deductible, that fee would apply to each repair.

Since you would not pay actual repair or even replacement, you can be responsible for paying a trade service fee of $65 – $125 for each repair. The fee is different for each contract, and it will cover the diagnosing of the problem you have.

Home Warranties Limitations


People are choosing their own home warranty plan from which the annual limit will depend.

In other words, the limit refers to the amount of money that the company provider will pay in case of the repair or replacement of some systems and appliances in your home.

For plans that include covering one item, the limit can be $1,000 – $2,000 each year.

Logically, more expensive plans will have a higher limit. Therefore, it is important to determine your policy and your exact coverage.

In case a provider decline to make payments for a certain appliance because it can not be repaired, they can offer you a replacement. One more case that a home warranty provider can deny paying is when the homeowner did not maintain certain appliances that he needed to.

The company can also deny service if the system or the appliance was not installed properly or there are some code violations. And the last deny can refer to extreme wear and tear or if there was a preexisting condition.

How Do You Know If You Need A Home Warranty Plan?


If you plan to sign a home warranty contract, it is important to think about all the items in your house and then determine if the home warranty is something that you actually need.

For instance, if you are having a heating system that will stop working soon, a home warranty can be a good solution that can save you from lots of costs.

Some of the basic questions that you need to consider before accepting this contract refer to the fact of whether you can afford to buy a home warranty. In general, the small costs of this contract can save you from enormous financial amounts later. Therefore, if you can afford it, it can be a valuable investment in the future as you can avoid huge unpredictable financial risks.

If you are not a first home buyer, you should definitely consider this contract because it can save you thousands of dollars in a long way because you can not be sure what kind of problems your house has. Even though everything seems perfect at first glance, some appliances or systems can be at the end of life.

In the case you own an older home, you should spare yourself from thinking about what of the items can stop working and whether you can afford the new investments.

If you are planning to sell your home, you should not worry about spending time and effort preparing your home for sale. Otherwise, you can sign the contract for a home warranty and whatever problem occurs, you will not worry about the repair or replacement.