Whether you are buying a new home or have been in your home for years, a home warranty can be a valuable asset. A home warranty is an insurance policy that covers the repair or replacement of major systems and appliances in your home.
While a home warranty is not required, it can give you peace of mind knowing that you will be covered if something goes wrong with one of your major systems or appliances. When considering a home warranty, you should keep a few things in mind. Let us take a look at some of them;
1. Understand why you need a home warranty
The first question you need to ask yourself is, why do you need a home warranty? If you buy a new home, your builder may offer a home warranty as part of the purchase agreement. In most cases, this warranty will cover the home for one year from the date of purchase. You may consider buying one after one year.
If you have an older home, a home warranty can be a good way to budget for unexpected repairs. Many home warranties will cover repairing or replacing items such as your furnace, air conditioner, plumbing, electrical, and more.
2. Find out what is covered by the home warranty?
One of the most important things to consider when purchasing a home warranty is what is covered. Each home warranty company offers different coverage options, so it is important to read the fine print and understand exactly what is covered. If you choose the First American Home Warranty coverage, for instance, you need to find out what is included before you buy.
In most cases, a home warranty will cover the repair or replacement of major systems and appliances in your home. This can include your furnace, air conditioner, plumbing, electrical, water heater, and more. Some companies also offer coverage for appliances such as your washer, dryer, oven, and dishwasher.
3. Find out what is not covered?
Alongside what is covered, you also need to find out what is not covered by your home warranty. Routine maintenance, such as changing your furnace filter, is not covered in most cases. Additionally, damage caused by negligence or abuse is also not typically covered.
It is important to understand what is and is not covered by your home warranty before you purchase it. This way, you can be sure you are getting the coverage you need.
4. Get to know the home warranty cost
The cost of a home warranty varies depending on the company you choose and the coverage you select. In most cases, the basic plan will start at around $250 per year. You can then add on additional coverage for an additional cost.
When considering the cost of a home warranty, it is important to compare the cost of the warranty to the cost of repairing or replacing a major appliance or system. For example, the average cost to replace an HVAC system is $5,000. If you were to add the HVAC coverage to your home warranty, it would likely cost around $500 per year. This is a much more affordable option than paying out of pocket for a new HVAC system.
5. Choose the best home warranty company
There are many different home warranty companies to choose from. When considering which company is best for you, there are a few things you need to take into account.
The first is the cost of the warranty. As we mentioned, the cost of a home warranty varies depending on the company and the coverage you select. Make sure to compare the cost of different companies before making your decision.
The second thing to consider is the coverage offered by each company. As we mentioned, each company offers different coverage options. Find a company that offers the coverage you need at a price you can afford.
The third thing to consider is reviews. Take some time to read online reviews of different home warranty companies. This will give you an idea of the quality of service each company offers. You need to make a home warranty comparison to find the best company for you.
6. Make sure you understand the terms of your warranty
Once you have selected a home warranty company, make sure you understand the terms of your warranty. Be sure to read over the contract to understand exactly what is covered and what is not. This way, you can be sure you are getting the coverage you need.
Bottom Line
Whether or not a home warranty is worth it is up to you. If you are buying a new home, it may be worth getting the coverage just in case something goes wrong. If you have an older home, a home warranty can be a good way to budget for unexpected repairs.
