A major home system or appliance can be expensive to repair or replace, and those costs have a way of showing up when you least expect them. A home warranty may help reduce some of that financial uncertainty by providing coverage for certain systems and appliances. Here’s what you should know before deciding whether a home warranty makes sense for you.
Even with a thorough home inspection, it can be difficult to predict when an HVAC system, appliance, or other working component might fail. That can mean an unwelcome repair bill shortly after buying a home, when your budget may already be stretched. A home warranty is a service contract designed to help cover the repair or replacement of certain home systems and appliances when they break down under the terms of the plan. Coverage, costs, limits, and exclusions vary, so it’s important to compare plans carefully. You can learn more about the typical costs of a home warranty before deciding whether one is right for you.
Although a home warranty is optional, there are several reasons you may want to consider one:
- A home warranty can provide some peace of mind by helping with certain unexpected repair or replacement costs after you purchase a home. If a covered system or appliance breaks down from normal wear and tear, the warranty may cover some or all of the eligible repair or replacement cost, subject to the terms, limits, exclusions, and service fees of your plan.
- A home warranty may also make handling a covered repair more convenient. Instead of searching for a contractor on your own, you typically contact the warranty provider, which may arrange for a service professional to assess the problem. Depending on the plan and the repair, you’ll generally pay a service fee along with any costs that aren’t covered under the contract.
Depending on the plan you choose, coverage may be available for systems and appliances such as:
- 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
Keep in mind that home warranties don’t cover everything, and coverage can vary considerably from one plan to another. Structural issues, pre-existing conditions, improper maintenance, certain components, and other items may be excluded. Before purchasing a plan, read the contract carefully so you understand the coverage, limits, exclusions, service fees, and renewal terms.
If you’re considering a home warranty for your current or future home, feel free to ask me about the options available. I can help you think through the questions to ask and whether adding this extra layer of protection makes sense for you.