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Did you know the most expensive repair cost for homeowners is repairing or replacing heating and air conditioning systems? The national average is $3,615. However, these systems and more are usually covered by a home warranty for a fraction of the price. Learn how you can save thousands of dollars by purchasing a home warranty for yourself.
It’s hard to know if HVAC systems or other working components in a newly purchased home may fail, even with a proper inspection, amounting to thousands of dollars at a time when extra cash is less available. A home warranty is a service contract that covers the repair or replacement of many of the working components of a property, including various home systems and appliances. A home warranty may be purchased at any time, but pricing is usually better closer to the purchase date or included with the closing costs. Given today’s repair costs, the average cost for an annual home warranty is a good investment.
Although a home warranty is optional, purchasing a home warranty can be valuable for several reasons:
- A home warranty can provide peace of mind to buyers by covering unexpected repairs or replacements that may occur after purchasing an existing home. Without a home warranty, surprise breakdowns can be costly and time-consuming as you attempt to find a contractor to fix them. In addition, if a system or appliance covered by the warranty does fail due to normal wear and tear, the home warranty company covers the cost of the repair or replacement, saving the homeowner money.
- When an item covered by the warranty breaks down or malfunctions, the homeowner doesn’t need to find a local contractor but instead contacts the warranty company. The warranty company arranges with one of its locally screened, licensed contractors to assess the problem on a covered item, decide to repair or replace it, and then bill the warranty company for the repair or replacement. The homeowner only pays a nominal service fee to the contractor.
Most home warranty companies include these systems and appliances in their coverage:
- Heating and cooling systems
- Electrical systems
- Plumbing systems
- Water heaters
- Major kitchen appliances, such as refrigerators and ovens
- Major laundry appliances, such as washing machines and dryers
- Garage door openers
- Pool and spa equipment
It is important to note that a home warranty does not cover everything (especially structural issues such as cracks in walls or ceilings). Buyers should carefully review the terms and coverage limits of the policy before purchasing a home warranty. A nice feature of many home warranties is that some of these companies will extend the coverage for another year at a pretty reasonable price.
Feel free to ask me about the different home warranty plans available and if it makes sense for you to purchase one with your current or future home.