Who Needs A Home Warranty?

Whether you are a first time home buyer or simply like the added security of having a warranty on certain items, a home warranty is something to consider. There are several benefits as well as drawbacks associated with this type of warranty so it is important to understand exactly what you are getting into before making a final decision.

A home warranty is essentially a warranty that protects the homeowner in the event a major home system or appliance needs to be repaired or replaced. This may include heating, cooling, plumbing and electric systems as well as major appliances such as refrigerator, stove, washer or dryer. When a home warranty plan is purchased, there is a yearly premium that must be paid, usually between $200-$500 which covers the maintenance, repair and replacement of items covered in the contract. This can come in handy when buying a home and in some cases is even included with the seller or real estate agent covering the initial cost. Home warranties are not just for new home owners, in fact some families choose to have a home warranty plan in place to make things easier and save time when an item breaks or is in need of repair.

If you are unfamiliar with home warranty plans and wonder how they work, it is really very simple. After purchasing your plan you basically call the service provider whenever any item covered under the contract needs attention. This may be an air conditioner that no longer works or a hot water heater that goes on the brink, as long as these items are covered under the warranty. After receiving your call, the service provider will then contact the appropriate technician with whom they have an established relationship. The technician will contact you, the home owner and make arrangements to come to your home for the needed repairs. As long as the repair or action needed is covered under your warranty, the only cost for the home owner will be a service fee which is generally less than $100.

A word of caution for individuals considering a home warranty plan. Each company as well as individual contracts have certain requirements and exclusions, therefore it is important to read the fine print and fully understand exactly what is covered before agreeing to the contract. A common complaint from home owners is that despite having a home warranty plan, they find many repairs are not included, often making the contract less than valuable in the event of a costly repair or replacement. The right circumstances covered by the right plan may render a home warranty plan worth the money invested in the yearly premium but it is important to know which circumstances are covered before moving forward.