What Buyers Need To Know About Home Warranties
The last thing you want to think about after buying a new home is things going wrong. Finding defects or needing repairs after buying a home really puts a damper on all the fun and excitement of enjoying your new space. However, planning in advance with a home warranty will help you protect yourself just in case something does happen.
Because things sometimes don’t go according to plan, it’s important for buying to know a few things about home warranties to protect themselves. A home warranty provides coverage in case something breaks after buying your home, so it’s a must no matter how perfect the home seems on paper.
How Do Home Warranties Work?
First, let’s talk about how these warranties work. They’re not unlike warranties you get for other things in your life. Anytime you’re investing a lot of money into something, you want to make sure it doesn’t come with defects or problems. This is true for smartphones, computers, cars, etc…so why would your home be any different?
So how does a home warranty work exactly? It’s basically the same process as a traditional warranty you’d have for anything else. The homeowner will contact their warranty coverage if something covered under the warranty breaks or stops working. Then, the warranty company will arrange assistance with a provider they work with who will fix the problem.
If the problem can’t be fixed, the warranty provider will pay to replace and install the new fixture or appliance, depending on the type of coverage. There might be a small service fee for a provider visit, but this is a small price to pay for peace of mind.
How Much Does a Home Warranty Cost?
Another common question is how much this type of home warranty costs. Believe it or not, these plans are pretty affordable. Home warranties cost around $350 – $600 a year.
When you compare that to the cost of the average home repair, this is huge savings. Home repairs typically cost homeowners 1% of the home’s value per year. That means if your home costs $300k, you can expect to spend around $3000 per year in repairs. A warranty translates to huge savings!
In addition, many home warranty providers have discounts or grouped coverage to help keep costs even lower. Remember, there might be a small cost when a service provider visits your home for a repair, but this is still insignificant compared to your overall savings.
Do Homeowners Pay for Warranties?
Who actually pays for a home warranty? Again, this will depend on how you buy your home and your local market.
Most often, the home seller or home builder will pay for coverage. This is usually to build trust and goodwill between the seller and buyer. If something goes wrong after the sale, the new owner won’t need to contact the previous owner.
What’s Covered in Your Plan?
Not everything is covered in most home warranty plans. You’ll need to review your particular plan to see what coverage you have, but most plans include the following:
- Air conditioner and heater
- Kitchen appliances
- Water heater
- Ductwork to code
- Inside plumbing stoppages
- Ceiling fans
- Electrical system
- Telephone wiring
How to Keep Your Coverage
Finally, you need to take some steps to make sure you don’t lose your warranty coverage. All plans have different rules and regulations, but most plans require you to maintain several things in order to keep your coverage active.
If you don’t maintain your home properly or violate local codes, you’ll likely find your warranty provider unwilling to pay. Make sure to keep up with maintenance and never install something improperly so your policy is active.
Protect Your New Home With a Warranty
If you’re buying a home, it’s a good idea to include a warranty in the process. You never know what might happen after purchase, so why not be safe rather than sorry?
However, before you sign on the dotted line, keep these things above in mind. From proper home maintenance to budgeting for repairs, you need to know what to expect from your home warranty.