Home warranties are a great idea, especially if something goes wrong on your home and you need someone to come fix it. Should you get one then? That depends. First, let’s cover what a home warranty is.
What Is a Home Warranty?
Unlike home insurance, which only covers you if your home’s structure and damage is harmed because of a fire, storm, or other accident, a home warranty covers you if something breaks. Warranties cost between $300 and $500 per year depending on what they cover. The type of home warranty you purchase will determine what it will or won’t cover. Typical warranties cover plumbing, electrical, water heaters, kitchen appliances, and heating and cooling systems.
When something in your home breaks and it’s covered by your home warranty, you call your home warranty company to put in a claim. Someone will be sent to take a look. If the problem is small, the repair person will go ahead and fix it. If it’s a larger repair, he or she may have to get approval from the home warranty company first. After the problem is fixed, you’ll be billed for the deductible. This is typically $50 or $75 per claim.
With that in mind, here are some reasons that you might want a home warranty.
You Have an Old Home
You’ll benefit the most from having a home warranty if you have an older home. New homes are less likely to have problems, but the older your home is, the more likely something will break. It could be small things like the outside faucet for your garden hose starts leaking or your water heater quits working. The main thing to remember is that home warranties cover malfunctions that happen from normal wear and tear. They don’t cover problems caused by weather or accidents.
You Want to Have a More Concrete Budget
One nice thing about a home warranty is you have a better idea of what things will cost. Rather than having a repair person come and having no idea what the cost will be till you get an estimate or a bill, you know you’ll only pay the deductible. If you’re worried about paying the $300 to $500 for the home warranty, many companies will allow monthly payments, making it easier to cover the costs and to budget.
You Are Selling Your Older Home
Image via Flickr by kellogg
If you plan on selling your older home, offering a home warranty to potential buyers is a great way to make your house more appealing. If the housing market in your area is slow or houses of that age are not as appealing as a new home, offering a home warranty can increase interest. They give buyers confidence that at least for the first year, any unexpected problems will be covered.
With any other types of warranties or insurance, you might not need the warranty at all, or it might save you from spending thousands of dollars. Plus, a home warranty can give you peace of mind, which is a great benefit.