Congratulations if you are moving to a new home. There is so much to consider as a new homeowner. It’s exciting to move to a new home, however when it comes to protecting it, the choices can get tricky. In this article, we’ll discuss the home warranty option so you can see if it is right for you.
Every new homeowner is usually offered a home warranty after purchasing the property. The home seller can decide to purchase the home warranty on your behalf. This gives you the needed peace of mind that faulty or damaged components in the home will be fixed.
A home warranty is an excellent type of financial protection against unforeseen, expensive home repairs or renovations. However, it may not be the full safety net you anticipate. In this post, we will be taking a look at what home warranty entails, the benefits, cost, and what they cover. This will help determine if getting one is worth it or not.
What Is A Home Warranty?
A home warranty is different from homeowners’ insurance and should not be considered as a replacement.
Homeowners insurance covers important risks such as hail, fires, and water damage that can affect the structure of the property. Homeowners’ insurance also covers the personal belongings of the homeowner. Whereas, the home warranty only covers certain components of the home.
A home warranty is a contract between the homeowner and the home warranty company. The home warranty is usually in the form of a discounted replacement and repair service on the major components of the home. The home warranty covers home components like the HVAC system, plumbing system, and electrical system.
Also, the home warranty can also cover other appliances like refrigerators, washing machine, swimming pool, and so forth. The components that will be covered by your home warranty will depend on the policy you purchase.
Benefits of a Home Warranty
Just like other types of warranties, a home warranty helps in protecting against expensive, unexpected repair costs. Both the home seller and buyer derive benefit from home warranty. Some of the benefits include:
Save You from Expensive, Unexpected Home Repairs
No homebuyer prays to be responsible for expensive repairs or renovations after purchasing a home. What if the components of the home were not well-maintained by the previous occupants? The home warranty will help save you from expensive, unexpected home repairs. With this, you can avoid any additional expenses, be it for repairs or renovations, after purchasing the home.
Not every home buyer has the time or experience to inspect all the components of the home. (Though an inspection should be conducted by a home inspection company prior to purchase.) Aside from that, some components may be on the brink of becoming damaged. What if you find them in good condition and they end up developing fault a few weeks after you move in?
With the home warranty, you have the needed reassurance that the home is well-maintained and you are not responsible for any expensive repairs. Thus, you can move in without having to worry about coughing out more money for unexpected repairs.
Entice Potential Home Buyers
In addition, the home seller also benefits from a home warranty as it can help entice buyers. The components of the home will be covered during the listing period. Some sellers also offer to pay for the first year of the home warranty after selling the home. This, in turn, entices the homebuyer to make the purchase. With a paid-up, one-year home warranty, you can get your property sold faster.
What Do They Typically Cost?
Homebuyers are usually obligated to purchase homeowners’ insurance coupled with their mortgage. On the other hand, the purchase of a home warranty is fully optional. The home warranty usually cost a few hundred dollars annually. Basic coverage starts from around $300 to about $600 or more for more comprehensive policies.
What’s more, the homeowner can pay the cost in installments or up front. The cost of the plan you are purchasing will also depend on the type of your property. There are separate plans for duplex, single-family home, townhome, condo, and lots more. The homeowner can also add extras if need be. This will help provide coverage other facilities like swimming pool, external well, and so on.
Asides the annual premium, the home warranty also comes with an annual service call fee. This is usually referred to as a trade call fee. The cost can range from $75 to $125. This is paid every time the home warranty holder requests a service provider to check out a fault in the property.
In case the fault requires two or more contractors to visit the home, different service call fee will be paid by the homeowner to each contractor. Several companies will offer you a home warranty at any point. However, you will get the best deal when purchasing the home.
What Do Home Warranty Cover?
Try as much as possible not to confuse a home warranty for homeowners’ insurance. A home warranty will provide coverage for replacements and repairs on systems and appliances within the home that may experience wear and tear over time. Some of the systems and appliances covered in by the home warranty include:
- Electrical systems
- Heating and cooling systems
- Plumbing systems
- Washer and dryer
- Kitchen appliances like the oven, cooker, garbage disposal, and so forth.
However, if you want to protect the structure of your home as well as your belongings for fire, flood, storm, and other accident, consider purchasing the ideal homeowner’s insurance policy.
A home warranty can help protect you against expensive, accidental repairs. The overall cost of the warranty may be a good investment when compared with cost of repairs, renovation, or maintenance. Nonetheless, it is not a perfect solution to the risk you will encounter as the homeowner. The home warranty will not cover home components that are not properly maintained by the former occupants.
Do Your Due Diligence
Some warranty companies can be purposely vague about what is covered in their policy. When the time comes for you to make a claim, you may find yourself excluded from the benefits. Check these potential warranty companies with the BBB and other consumers before signing a contract with them.
Above all, before you purchase any home warranty, take time to read and understand what is in the home warranty contract. Consider if the warranty will benefit you or not. Aside from that, ensure that you are purchasing your home warranty from a reliable company. With this, you can have the needed assurance that you are well covered regardless of the situation.
Did you just purchase a new home and in need of a reliable moving company to help with moving and packing? Contact us today at Colonial Van Lines. Our services are affordable, detailed, and highly professional. We always guarantee a stress-free and enjoyable moving and packing experience.