What to Know When Buying a Home Warranty

What to Know When Buying a Home Warranty

Image by ds_30 from Pixabay

When someone rents a property, they can call the property manager or landlord if something breaks or stops working properly. However, when they purchase a home, this is no longer possible. Now, it is the homeowner that is responsible to make all home repairs, which includes any issues with systems and appliances.

A good way to handle these repairs or replacements is by investing in warranties for homeowners. Home warranties are designed to cover the major systems in the home, including plumbing, HVAC, and electrical, as well as home appliances. The protection provides peace of mind for any homeowner, which is invaluable.

The Home Warranty Defined

Before going any further, it is a good idea to learn what a home warranty really is. It does not matter if a person is a first-time homebuyer or if someone is buying their fifth home, it is necessary to know what a modern home warranty has to offer.

Home warranties are a type of annual service contract that will cover the repair or replacement of a major appliance or system. Some of the household items that are covered include specific appliances, such as the dishwasher, as well as certain home systems, such as the HVAC system.

One of the main conditions of a home warranty is that the systems and appliances that are covered need to be on a regular schedule for maintenance. This coverage is different from traditional home insurance, which is going to cover loss or damage that is caused by a natural disaster or another covered event.

The Home Warranty and How It Works

Coverage from a home warranty will extend for a specific contract term. Usually, this is for one or two years. Once the specified time period has passed, the homeowner can choose to cancel the coverage or to renew it.

Home warranties work in specific ways. For example, rather than making a service call to local repair service when a major system or an appliance breaks, it is a good idea to contact the provider of the warranty. The provider is then going to request that the item be repaired using a third-party service. This is a company that the warranty company has a pre-established business agreement with.

Once contracted, the service company will contact the homeowner to schedule an appointment for repairs or an inspection. Remember, some home warranty service providers may charge a homeowner a service fee for the repairs that are made. The fee is never included with the actual cost of the repair that is done.

How Can a Homeowner Tell if a Warranty Plan Is Needed?

When thinking about the purchase of a home warranty, it is a good idea to review the items that are in the home and figure out if the warranty would provide any additional value. One example of this is if the HVAC system is getting close to the end of its useful life. In this situation, having a home warranty plan may be beneficial and help a homeowner avoid additional fees.

The home is one of the biggest investments a person is ever going to make. This means that taking additional precautions will help someone protect their investment. When trying to decide if a home warranty plan is a right option, there are a few basic things to consider. Keep reading to learn what these important considerations are.

Image by Michal Jarmoluk from Pixabay

Is a Home Warranty Budget-Friendly?

The small upfront cost of a home warranty can help to save a homeowner a lot of money down the road. However, they should carefully consider if it fits in the budget they have. In some cases, this is going to be a smart investment to help avoid financial stress later on.

Is the Person a First-Time Homebuyer?

In some situations, a first-time homebuyer will purchase a plan while they are closing on their new home. Spending just a little bit of money every month is going to help a homeowner save a lot of money when something breaks down. Remember, buying a home is going to be stressful, so it is a good idea to make an investment in the homebuyer’s peace of mind.

Do They Own or Are They Planning to Purchase an Older Home?

If someone plans to buy a plan when their home reaches its 10-year anniversary, it is a smart investment. The home warranty that is purchased may provide help with future costs.

Does the Homeowner Like to Take on DIY Projects?

If someone does not want to spend money on future appliance repairs, it may be a good idea to invest in a home warranty. Handling repairs is a job that requires both knowledge and skills. If a person does not have the proper training, repairs may be quite dangerous and may cause more damage than what was there to begin with. A homeowner can do themselves a favor and avoid future issues by purchasing a home warranty.

Does the Person Own a Tiny or Mobile Home?

A home warranty policy will also apply to mobile homes and tiny homes. Even if a very small investment has been made, it is still a smart move to take steps to protect it.

Are There Plans to Sell the Home?

If someone has put in a lot of hard work getting their home ready to sell, they want to make sure that nothing goes wrong in the final days. Home warranty plans will be the perfect way to keep the home going until it is time to move. Also, it is a great marketing tool because it is possible to transfer the warranty to the new buyer.

Finding the Right Home Warranty

When it is time to buy a home warranty, there are more than a few factors to consider. Be sure to keep the tips and information here in mind, which is going to ensure the right warranty is purchased. In the long run, this is going to help ensure home and the homeowner are fully protected.