Most house hunters realize that buying a home is a big investment, but many do not calculate the ongoing costs of ownership. Appliances and major systems will break down over time. Even the warranties on brand-new homes eventually expire, leaving homeowners liable for any repair expenses. With these issues in mind, some providers offer home warranty services that help homeowners avoid paying large, unexpected repair bills. There are various types of coverage so that policies can be customized for customers’ needs.
What’s a Home Warranty?
A home warranty is a service contract that pays the cost of repairing or replacing covered items. These typically include electrical plumbing, HVAC systems, and major kitchen appliances. Home warranties don’t cover smaller or freestanding appliances, nor do they cover doors, windows, flooring, and other structural features.
Warranties are created to insure the cost of repairing or replacing systems and items that are in good working order when an owner moves in but eventually fails. Policies cover issues caused by normal wear and tear and require that clients maintain systems and appliances properly. According to Bankrate, home warranties differ from homeowners’ insurance. Both are associated with damage and cost coverage, but homeowners insurance pays for items lost due to perils like fire or theft.
Who Needs a Home Warranty?
Anyone can buy a home warranty to protect them from unexpected expenses. It isn’t necessary to be in the process of a real estate transaction to purchase a warranty, but many home buyers and sellers purchase coverage.
Sellers often buy policies to ensure they are covered if a major system or appliance needs repair while their home is on the market. The coverage can save them a lot of money if a home is under contract and an expensive system like air conditioning needs replacing.
Home sellers may also purchase warranties to attract buyers. Prospective owners know they won’t have to worry about major repairs while the contract is valid. That can be incredibly enticing when an older home with older appliances is for sale.
Some buyers ask sellers for warranties on older homes. However, if the seller doesn’t provide coverage, buyers can purchase warranties to protect against the failure of older appliances and systems. Per U.S. News, the option can be especially valuable for owners who are new to an area since warranty companies use a network of trusted, pre-vetted contractors.
How Do You Buy a Warranty?
Buying a home warranty is not tricky, but following a few basic steps is crucial to ensure you get the best coverage for your needs. Company offerings can differ, and customers can choose coverage ranging from basic to comprehensive.
Get quotes from several providers. Read Google reviews of companies and, if possible, talk to experts like realtors who deal with home warranties often. Ask friends about their experiences.
Read the policy. Ensure you understand the full warranty, and ask questions about anything that’s not clear. People who don’t read the terms and conditions are more likely to be unhappy with their policies since they won’t understand the coverage.
Home warranties are contracts homeowners can purchase to cover the cost of repairing or replacing home appliances or systems. Before buying a warranty, it is essential to determine what coverage is needed, compare several providers, and read the policy carefully.