Individuals buying a home are making a major financial commitment. The last thing they want to worry about once this sale goes through is whether a major repair is just lurking around the corner.
They want to spend their money decorating the home rather than fixing things that break down. A home warranty helps them cover any repairs that are needed, so they can focus on making this house their home.
In fact, during 2020, one in every four homes sold came with a home warranty. Buyers wanted this protection, particularly during that difficult time. As more people learn the benefits of home warranties, they will turn to 2-10.com to discover the plans they have available to them. When doing so, when should these men and women know?
The Basics of a Home Warranty
Home warranties should never be confused with homeowner’s insurance. The warranty is similar to an extended service contract purchased through a manufacturer, but this contract is provided by a third party and covers multiple appliances or systems in the home rather than one. This coverage must be purchased, typically one year at a time.
Items Covered Under the Warranty
While homeowner’s insurance covers damage caused by accidents, acts of nature, and other humans, a home warranty covers the cost of repairs or replacement when the damage is the result of normal wear and tear.
Coverage varies by the plan and provider selected, but most plans offer some level of coverage for major household systems and appliances. Homeowners may purchase additional coverage if they need other items in the home safeguarded.
For example, the homeowner might choose to purchase optional coverage for their septic tank, pool, home automation, and more. This add-on coverage comes with an additional charge, much like insurance riders do on homeowner’s policies.
The Benefits of Home Warranties
Why would a person want to spend additional money when purchasing a home? The home warranty provides them with peace of mind, as they know they won’t need to spend a significant amount of money soon after buying the home to make one or more major repairs. What other benefits come with this purchase?
Long-Term Savings
When a person purchases a home, lenders require a home inspection. The major household systems and appliances may pass this inspection only to break down soon after. The new homeowner thought they were safe and wouldn’t have this worry, only to learn they are responsible for the repair costs.
Purchasing a warranty ensures there is a second set of eyes inspecting these appliances and systems before the home is purchased. The new owner knows exactly what could go wrong. When it does, the warranty provider ensures it is covered.
Not only will this save them money immediately, but prompt repairs reduce the risk of additional repairs in the future. Any failing component in a system or appliance can harm other parts. Quick action reduces the risk of this happening. When a homeowner has a warranty, they can call for this repair even if their money is tight following the purchase of the home.
Expert Repairs
A new homeowner might be tempted to tackle a repair on their own. With their lack of experience, however, they could do more harm than good. Leave this task to a qualified contractor provided by the home warranty company and know the work is done right.
Peace of Mind
A home warranty allows the new owner to enjoy their purchase. They won’t be waiting for the other shoe to fall. They can furnish and decorate the home, knowing the money they are spending won’t be needed for a major household repair in the coming weeks or months.
The Drawbacks of Home Warranties
When a seller pays for the home warranty, there are a few drawbacks for the buyer. Nevertheless, there are a few things the owner needs to know.
Contractor Choice
The warranty provider chooses which contractor to use for a warranty repair or replacement. The homeowner does not have a say in this, which some people dislike. Other individuals appreciate not having to vet contractors, so this is a drawback for some and a benefit for others.
In addition, if the appliance or system must be replaced, the warranty provider chooses the make and model rather than the homeowner. The homeowner might not like what is selected. This can become an issue if several appliances or systems fail while the warranty is in place.
Coverage Misunderstandings
One of the biggest complaints seen with home warranties involves the coverage provided. A homeowner might believe they have a valid claim only to find it is denied.
The fine print on the contract outlines all details, including what items are and are not covered. It also contains information about coverage payouts, policy limits, and more. Read this information carefully to clear up any misunderstandings.
An Added Bill
Owners who choose to purchase their own home warranty have another bill to pay each month. This increases the monthly cost of home ownership. However, the savings seen when a repair or replacement is needed should offset these costs.
It all depends on whether the owner actually needs to use the warranty. That will determine whether the purchase was a smart move.
Who Purchases This Warranty?
A home buyer or seller may purchase a warranty. Any homeowner, once they own a residence, may also make this purchase. It does not have to be obtained when the home changes hands. However, renters cannot buy a warranty. This purchase must be made by the actual owner.
The Cost of a Home Warranty
People often want to know the cost of a home warranty. This varies by provider and the plan selected. A person should compare several plans across multiple providers to find one that offers the level of protection they desire at a price they can afford.
Warranty Savings
Over 75 percent of individuals who purchased a home in 2020 had to make a household repair in the 12 months immediately following this purchase. More than half of these men and women spend over $1,000 when doing so. The home warranty could have saved them a significant amount of money.
However, the key lies in finding the right provider. Don’t make this decision based on price alone. Research multiple providers to find the highest level of coverage at an affordable price. Those who do so find they are more satisfied with the plan once it is in place.