What is a home warranty?
In a nutshell, it's a policy you pay for that covers the cost of repairing many home appliances if they break down. After all, lots of things you buy come with a warranty in case they break down, from cars to smartphones. But what about homes? It turns out you can get a home warranty, too.
What does a home warranty cover?
Don't mistake a home warranty for homeowners insurance, which covers your home's structure and belongings in the event of a fire, storm, flood, or other accident. A home warranty, in comparison, will cover repairs and replacements on systems and appliances due to normal wear and tear—no calamities required.
- Electrical systems
- Plumbing systems
- Heating and cooling systems
- Washer and dryer
- Kitchen appliances such as the oven, range, and garbage disposal
How much does a home warranty cost?
While home buyers are often required to get homeowners insurance along with their mortgage, home warranties are a fully optional purchase. Basic coverage starts at about $300 and goes up to $600 for more comprehensive plans. A homeowner can add extras if needed, such as coverage for a swimming pool or an external well.
Benefits of home warranties for home buyers and sellers.
A home warranty benefits home buyers by providing reassurance that they can move in without worrying about shelling out even more for surprise repairs. A home warranty can also benefit home sellers (if they don't have it already), since it can cover these elements during the listing period; some companies even offer free seller’s coverage during this timewith the hopes that the buyer will decide to continue the coverage. Oftentimes, home sellers will offer to pay for the first year of a buyer's home warranty to entice buyers to bite.
But not everyone thinks home warranties are worth the cost. Typically they aren't necessary with new homes, since most of the appliances are already covered under manufacturers' warranties. But in general, the older your home, the greater the odds are that something's bound to break, and the wiser it is to get a home warranty. Best of all? Many companies don't differentiate between newer and older homes in terms of cost, making a warranty an especially cost-effective option if you are purchasing an older home.
Ask us about our FREE HOME WARRANTY Program!