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Home Warranty: Do You Really Need It?


Without a doubt, a house is one of the biggest investments that you can make in this lifetime. With the rising cost of real estate and not-so-good state of the global economy, you need to make the most out of such an investment and protect it from potential risks. Among others, one of the best ways to minimize the risks is to purchase a home warranty. However, there are still some people who think that it is an unnecessary expense. That being said, keep on reading the rest of this post and learn whether you need it or not.

What is a Home Warranty?

Also called a home owner’s warranty plan or a home protection plan, basically, it refers to a policy with the goal of protecting your appliances and systems at home. As the homeowner, you will enter into a contract with your chosen home warranty provider. The home warranty will provide coverage in case of breakage of the appliances or system, or in an event that they need maintenance. In a nutshell, a home warranty will cover the repair maintenance and replacement of household appliances, as well as your electrical, heating, cooling, and plumbing systems.

Home Warranty vs Home Insurance

It is important to note that home warranty and home insurance are not one and the same, although it is a fact that they can both give you peace of mind. They will minimize financial burdens on your end once you are confronted with an unexpected situation, although the coverage is different. As it has been mentioned above, the main coverage for a home warranty includes your major appliances and systems in the house. They will come in handy in an event that your cooling system breaks down or your dishwasher suddenly stops functioning. If it can no longer be repaired, depending on the specific terms of the policy, they can be replaced.

In contrast, the coverage of a home insurance is wider. The policy covers perils such as theft and damages caused by fire, among others. It covers damages to the entire structure or house, and not specific appliances or systems. This is as against a home warranty that covers individual components at home, such as your air conditioning system, refrigerator, or even the swimming pool.

The Benefits of Having a Home Warranty

In one article from Forbes, the author notes that the biggest benefit of having a home warranty is that it can provide you with peace of mind. That is priceless! You can sleep peacefully knowing that your home appliances and systems are covered. If there is an appliance that breaks at home, there will be someone available as soon as possible to have it fixed without any question asked. If you are not a handyman, the home warranty is sure to be a handy policy to have. This will also be great for first-time homeowners.

To add, a home warranty reduces financial uncertainty. You can be confident that you do not need to pay for broken appliances and systems. This minimizes the financial burden on your end. There will be fewer unanticipated costs. All that you have to do is to pay for the premium. If you are selling a property, a home warranty will be an excellent marketing tool. More buyers will be attracted if they know that the price that they will be paying is already inclusive of a home warranty.

Choosing a Home Warranty Provider

With the plethora of options available, making the right decision can be a challenge. One of the first things that you need to do is to research. Talk to your neighbors, friends, or anyone else who has purchased a home warranty before. Ask for their personal experiences to weigh the pros and cons of the possibilities. You should also consider the specific items that are covered by the warranty before you reach a decision. The range of the appliances and systems covered will differ from one policy to the other. Basic plans will most likely cover the basic appliances. Often, you can purchase an add-on depending on what you have at home.

More than the specific items that are covered, a more important consideration is the premium that you will be paying. If you are availing of a basic coverage, the premium will be easy on the wallet. If you need more to be covered, such as hot tubs and swimming pools, expect that you will most likely have to pay more. A standard plan can cost around $200 annually, according to Consumer Reports. If the electrical and plumbing systems are included, however, the cost can be as much as $800.

Before you make a decision, you should create a shortlist with at least three providers. Get a free quote and compare their offers. Do not immediately decide after seeing a quote only from one company.

A Note About Home Warranty

While a home warranty can indeed be beneficial in more ways than one, there are also some things that you have to remember. For instance, one of the most important is to remember that it does not cover problems that are due to your negligence. If an appliance breaks down because of your failure to execute the necessary maintenance, the policy will be void. Proper maintenance, however, is a clause that is often a subject of dispute. Also, having a home warranty does not necessarily mean that you will incur zero cost. Depending on the terms and conditions, you might still need to settle a co-payment for the contractor who will handle the repair. The amount, however, will be significantly lower compared to what you will have to pay when you are not covered by a home warranty.

Wrap Up

From the things that have been mentioned above, it is pretty much clear that a home warranty is a must-have if you want to have peace of mind. It should not be seen as a luxury but as a necessity. This way, if your appliances break down or age, they are covered by the policy. In the long-term, this can translate to huge savings for homeowners.

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