Wednesday, 18 October 2017

4 Things to Know About a Home Warranty

Written by Posted On Thursday, 05 January 2017 18:48

You work hard to create a home that you love coming home to every day, but there are so many things that could go wrong without warning. One day your oven might be in top shape and then break down the next. Are you covered if this happens? Are you able to pay for a full replacement? If you’re worried about your appliances, a home warranty might be for you. Here are three things you need to know to keep your home safe.

Your Home Warranty Is Different From Home Insurance

Image via Flickr by Scott SM

Most people are familiar with home insurance. They understand that it covers repairs to your home in the event of a catastrophe like a tornado or flood. It covers payment or replacement of the actual structure, your personal belongings, and liability if someone is hurt around your home.

Meanwhile, a home warranty covers everyday wear. If your oven breaks because it’s old and worn, your insurance won’t cover it. Warranties aren’t required if you have a mortgage on the house, but they are recommended for extra security. The most important thing to remember is that home warranties and home insurance aren’t the same thing. You can’t use one for the other, and you really need both.

Know What Your Home Warranty Covers

Most people think about appliances when they consider home warranties. They invest in them as a way to affordably replace ovens, dishwasher, refrigerators, and water heaters. However, some home warranties will extend their coverage based on your home and area. For example, your plumbing systems, electrical systems, and roofing might also be covered under specific home warranty plans.

Your home warranty might also cover the replacement of small items under certain plans. Very few basic plans cover the replacement of dishwasher racks or baskets, but some premium options do. If you really want to ensure that your appliances will never hurt your bank account, these plans might be for you.

Cost Varies Depending on Coverage

Basic home warranties cost between $300 and $900 per year, but can cost more than $2,000 per year if you want a specific package. Before you buy a home warranty, shop around based on price and desired coverage. Some home warranties might only offer partial coverage or adjust their coverage based on the appliances, while other warranties only cover specific contractors.

You need to ask what kind of repairs are likely to occur within your home and how much help you would need paying for them. If you’re someone who isn’t able to keep money in your savings account for long without spending it, then investing in a home warranty is a great way to set aside money specifically for an unplanned accident. However, if you are able to partially pay for replacements, then a smaller warranty that simply offsets the expense is a better option.

Every homeowner needs to decide if they want to invest in a home warranty. The decision is based on the state of the home along with the state of their bank accounts and averseness to risk. In many cases, home warranties are a great option for preventative payments of major breaks.

 

 

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