Do You Need a Home Warranty?

What is a Home Warranty?

A home warranty is a service contract that pays the cost of repair or replacement of covered items, such as major kitchen appliances, as well as electrical, plumbing, heating, and air conditioning systems. A home warranty shouldn’t be confused with a homeowners insurance policy.

How it Works

Every year that you want to be covered under the warranty, you pay an annual premium which can range anywhere from a few hundred to a thousand dollars, depending on the size of your home.

When something in your home breaks down, you pay a deductible that can vary, according to the terms of your warranty. However, it usually falls between $50-$125. The warranty company will then send out a service company to make the necessary repairs or replacements if needed.

Benefits

• Peace of mind
• Big savings on common repairs
• Discounted service calls
• Great for those that are not handy
• Helps new homeowners that are unfamiliar with their new home’s systems
• Fewer unanticipated costs

Risks

• Not everything is covered (it is important to read through the terms of your warranty to see what is excluded)
• No guarantee of replacement verse repair
• Most companies give you no choice in service providers (please reach out to me to find out who allows you to pick your own providers)
• They won’t cover items that have not been “properly maintained”
• Yearly premiums

How to Decide

Home warranties can help give peace of mind to some of your maintenance concerns, but it’s not entirely fail-safe. Do your research and read over the contract before purchasing a home warranty, so you know what may or may not be covered.