What Is a Home Warranty?
A home warranty is a service-contract entered between a homeowner and warranty provider, it covers the costs of repair or maintenance of household systems and appliances that usually undergo wear & tear due to regular usage. In most cases, the contract covers a period of 1 year.
When a covered item breaks down, the policy owner will typically call the home warranty firm to send a technician to examine the issue. Consequently, if the company determines that the problem identified is covered by the home warranty, they will dispatch their technician to solve it within the shortest time possible. The owner will only be required to pay a small service fee once the work is complete.
The Difference Between Home Warranty and Home Insurance
While both home insurance and home warranties offer protection to your house, there are differences that exist between them. Home warranties are purely elective and considered a form of smart purchase, whereas home insurance is mandatory for anyone who’s purchasing a house for the first time.
Additionally, the warranty covers repair or replacement of regular components and appliances such as washers and dryers, kitchen appliances, plumbing electrical and HVAC system. Whereas home insurance covers accidental damage to your house and belongings due to fires, storms, theft and various natural disasters. An insurance policy consists of 4 main areas which include; personal property (in the event of theft, damage or loss), the exterior and interior of your house as well as general liability that may arise when someone is accidentally injured on your property.
Apart from basic household components, a home warranty cover can also be used for larger systems such as your spa and pool. Similarly, there are appliance and system combination plans that can be purchased together for an even lower price, with add-on coverage for assets such as your additional refrigerator at no extra costs.
What Items Are Protected by a Home Warranty?
As mentioned above, a home warranty covers the repair and replacement costs of various household items. However, specific coverage depends on the terms and conditions of your selected plan, and the total number of items you have chosen to be covered. The service provider will come to help in case of mechanical failure caused by normal wear & tear under your contract terms.
Some of the items covered by a home warranty include; Plumbing System and Fixtures, Kitchen Exhaust Fan, Ceiling Fan, Garbage Disposal, Garage Door Opener, Washer and Dryer, Built-In Microwave, Water Heater, Central Air Conditioning, Interior Electrical System, Oven, Refrigerator, and Icemaker Dishwasher.
Maintenance Costs and Warranties
Typically, this coverage costs a few hundred dollars per year, the money can either be paid upfront to the service provider or in installments if the warranty firm has a flexible payment plan. Furthermore, the policy price may vary depending on the type of property you own, whether it’s a condo, townhouse, single-family detached or duplex, including whether you are taking a basic or extended plan.
On average, the average amount you’ll pay for a home warranty per year is anywhere between $300-$700 dollars. In addition, you might pay a service call fee of around $75-$125 dollars each time the warranty company sends a technician to your house to do repairs/replacement.
Nevertheless, signing up for a home warranty doesn’t mean that you’ll never spend a dime on home repairs again. Sometimes the company may not offer coverage plans for certain items in your house, or you could just have forgotten to buy a cover for that particular item, which in that case you’ll have to pay for the repairs on your own. But rest assure that all the major appliances like fridges and ovens are thoroughly covered in home warranties.
In conclusion, a home warranty can save you from the expensive costs of repairs and replacement of damaged household systems and appliances. Though it’s an optional cover, it’s highly recommended to have one for your house for convenience purposes.