Owning a home includes a great deal of responsibility. Property owners must provide regular maintenance and service to all their appliances and systems in their homes to ensure they continue to work properly. Unfortunately, even with proper care, appliances and systems can still have problems or even break down.
These issues and breakdowns can be quite costly, especially for new home buyers that are working with a small budget due to the costs of purchasing and moving into their new home. Fortunately, a home warranty provides a method to ease the burden of these issues.
What is a Home Warranty?
A home warranty is simply a service contract for homeowners. They can receive coverage for the various appliances and systems in their home. The home warranty cost is relatively low and can save homeowners hundreds or even thousands of dollars if they need repair or replacement service for any covered appliance or system.
Simply put, a home warranty provides deeply discounted repairs for covered appliances and systems. If the system or appliance has become too worn to be repaired, it can be easily replaced at a fraction of the cost. For many homeowners, coming up with the costs to replace a furnace unexpectantly can be impossible. For simply a set service fee, the system can be replaced using a home warranty.
What Does a Home Warranty Cover?
A home warranty can be customized to cover a variety of household appliances, systems, and other parts of the home. The basic appliance plan offers coverage for the basic appliances in a kitchen. This includes the stove, dishwasher, refrigerator, and built-in microwave. However, if a home has other kitchen appliances, they can be added.
The home systems coverage provides protection for the home’s heating and cooling units, plumbing, and electrical system. Whenever there is a problem or breakdown due to normal wear and tear, these things can be repaired or replaced for the price of the service fee.
There are also plans that can provide coverage for additional features in the home such as sump pumps, pools, spas, and laundry appliances. Homeowners can even add coverage for handles, faucets, and other odds and ends in the home. This can provide complete protection and peace of mind for homeowners.
How Does a Home Warranty Work?
The claims process for a home warranty is rather simple. This process is often a great benefit for homeowners as it removes the frustration of trying to find a service contractor in the area. The home warranty company works with many local contractors to ensure there is a service provider when needed.
If there is a problem with a covered appliance or system, simply contact the company by phone or online. A local service contractor will be dispatched at an appointment time that is convenient for the homeowner. The service fee is then paid when the contractor arrives.
The service contractor will find a solution to the problem and either provide the proper repairs or replace the unit at no additional charge. Homeowners can enjoy the problem being corrected without breaking their budget.
What is the Cost of a Home Warranty?
The cost of a home warranty can vary greatly depending on the type of coverage homeowners need. A basic kitchen appliance plan can cost as low as $19 a month. Although adding more to the plan can increase pricing, the cost still tends to stay under $1500 a year, with the average being around $600.
In addition to the monthly or yearly costs of the plan, there is also a service fee. Each time a homeowner needs to have a service contractor sent to their home for a covered appliance or system, they will need to pay a set service fee. Whether the system or appliance needs a repair or a replacement, there will be no additional cost to the homeowner up to the dollar limit set in the warranty contract.
How Does a Home Warranty Save Homeowners Money?
Homeowners can save a lot of money with a home warranty. This can be greatly beneficial for those on a tight budget, especially during the first year after purchasing the home. When the budget is extremely tight, it can be hard paying for a major furnace repair or a new refrigerator.
If a home’s furnace breaks down and needs to be replaced, it can cost a homeowner between $1795 and $6290 for the new unit. This cost is in addition to the service fee paid to the contractor to inspect the furnace and determine that it is beyond repair. Those who do not have the money for this service may not be able to heat their home until they can raise the funds.
With a home warranty, all a homeowner will pay is the monthly cost of the plan and the set service fee for the contractor to come to the home. This service fee can vary between $85 and $125, depending on the type of plan. This can save homeowners significantly on the price to replace their furnaces.
What is the Downside of a Home Warranty?
As with anything, there are a few downsides to having a home warranty. The main issue many people seem to be concerned with is having less control of the decisions. It will be the final decision of the home warranty company as to whether an appliance or system needs to be repaired or replaced. The home warranty company also decides the contractor that will handle the service.
The home warranty only covers issues due to normal wear and tear. They do not cover issues caused by a lack of proper maintenance or damage done to the appliance or system. For example, the home warranty is not going to cover a furnace that has broken down due to the filter not being replaced for ten years or the refrigerator that quit working after being hit repeatedly with a bat.
As with anything, it is always a good idea to research the pros and cons of a home warranty. These contracts are not always the right fit for everyone. However, they do provide a lot of benefits that can help homeowners keep their homes running safely and comfortably.