Purchasing a Home Warranty: What You Need to Know
(UniquilibriuM) As a new or existing homeowner, you may be wondering whether a home warranty would be a worthwhile purchase. You may have been offered one by the seller, received solicitations from a few companies, or just heard good things about them. While home warranties offer peace of mind and safeguard you against many problems, they can be expensive and, depending on the provider, don’t always provide comprehensive coverage. Today, Wealth Attraction Research offers some tips and resources to help you make an informed decision.
What is a home warranty?
A home warranty is a service contract between you and the warranty provider. It covers repairs and sometimes replacements to certain home appliances and systems – think refrigerators, microwaves, dishwashers, HVAC systems, toilets, and electrical systems. You pay a monthly or annual fee for a home warranty as well as a service call fee every time you call a technician. In return, the provider covers the repairs (or replacement) and, typically, also sets up contractor visits.
Don’t confuse a home warranty with home insurance. The latter covers different things – such as structural damage to your home – and is often purchased as an addition to the warranty (or vice versa). CBS News explains the difference between the two if you’re curious.
How you benefit from a home warranty
The benefits you receive depend on the service provider; more specifically, their experience and network of contractors will determine the quality you receive. You can find the best home warranty providers online. Some of the benefits you can expect to receive are below:
- Money savings: A home warranty can protect homeowners from having to pay expensive repair and replacement costs if a major home system or appliance breaks down due to normal wear and tear.
- Time savings: You don’t need to spend hours looking for a reliable local contractor – the home warranty provider expedites the process for you.
- Peace of mind: Knowing you have a safety net in place and can ask for help if an appliance breaks down can make you feel safe and secure.
Reasons to purchase a home warranty
Besides the benefits mentioned above, there are specific scenarios where purchasing a home warranty could be useful:
- Selling a home: As a home seller, if you offer a home warranty, you receive some protection against complaints about defects after the sale closes (you’re legally liable for them).
- Expertise and safety: Depending on the service provider, you can consult with contractors or have unlimited service call visits whenever you have problems (like a clogged toilet) or have safety concerns that need to be addressed (faulty HVAC).
- Buffer: If you don’t have emergency savings, your home warranty can be a safety net if a critical system fails and needs to get back up and running again.
How to choose an appropriate home warranty
Not all warranties are equal or worthwhile. You should research service providers and carefully go over the specifics of the warranties they’re offering to find something solid. We offer some critical considerations here:
- Home warranty coverage: First, take a look at the coverage, which is the specific parts that can be repaired or replaced provided certain conditions are met. Obviously, you want to find the best deal out there; here’s a possible solution that’s worth checking out!
- Limits and exclusions: The limit is the maximum that the company is willing to cover, an amount that’s set per item or on the contract as a whole. The exclusions are the parts that aren’t covered.
- Company’s contractors: Check whether a company’s contractors are licensed and bonded. Their experience and expertise also count.
- Ratings and reviews: Last, but not least, are the company’s general reputation. Look for verifiable testimonials, happy customers, courteous customer care, and many years of service.
Be sure to consider your home’s age and the state of your home’s appliances or systems before making a final decision. Also, shop around and get a few quotes from providers before picking something.
Keep your home warranty documents organized
Don’t forget to keep your home warranty documents organized and within easy reach. You’ll need to furnish them if you ever need to make a claim. Making digital copies is possibly the most convenient option. You can create a PDF file for all your documents then use a PDF editor to make any required changes. Once you save the file, you can rename, download, and even share the new PDF with others (like your provider).
Home warranties offer peace of mind, easy access to reputable contractors, and money savings if critical appliances or home systems break down. When determining whether to purchase a home warranty, calculate the potential return on your investment first – sometimes, it makes more sense to create an emergency fund than pay a monthly or annual fee. At other times, home warranties are a worthwhile investment.
Wealth Attraction Research offers information on Vocational and Avocational Motivation, Self-Improvement, and more. If you have any questions, feel free to scroll down and leave a reply. Image via Unsplash