As a homeowner, you have to be prepared to face the common households problems – a faulty household appliance, a leaking faucet, or a short circuit. However, there are some problems we cannot resolve on our own and we need to seek the help of a professional who has more skills, knowledge and experience in dealing with such situations. This also means you have to pay them for their services. This is where a home warranty policy comes in handy. Haven’t heard of it? Better continue reading to learn more about it.
What is a home warranty?
A home warranty refers to a service contract that covers repairs and replacement of your appliances and other systems within your home. This should not be confused with homeowners insurance since the latter covers major perils like fires, hail, property crimes along with certain types of water damage that affects the entire structure of the house and the personal possessions of the homeowner. Home warranty, on the other hand, covers only specific components of the home.
How much does a home warranty costs?
The costs of a home warranty vary on the level of coverage that you purchase. However, the typical annual premium ranges from $250 to $500 along with a fee per service incident which usually costs $50 to $75. Luckily, home warranty companies sometimes offer special sales, discount policy prices, and/or additional coverage for the same price.
How does a home warranty work?
Although there are different plans that provide specific types of coverage, most policies work the same way. To start, the home appliance or system breaks down or stops working, hence, the homeowner calls the home warranty company. The company gets in touch with a service provider, which it has a business arrangement with and the specific provider contacts the homeowner to make an appointment. The provider will try to resolve the problem, however, if it’s unfixable, the company will pay to replace and install the appliance depending on the warranty coverage. The homeowner will also need to pay a trade service fee, which is usually less than $100.
What does a home warranty covers?
Home warranty plans are quite different but most of them cover things like major appliances (oven, refrigerator, dishwasher, microwave, washing machine) heating and cooling systems (air conditioners, heat pumps, furnaces), plumbing (faucets, swimming pools, sprinkler systems, indoor pipes and drains) and electrical systems (wiring, door bells, garage door openers).
Although a home warranty isn’t a perfect solution for the risks homeowners face, it’s still beneficial especially if you’re buying a home that comes with old components and appliances. Just be sure that before purchasing one, you thoroughly read the contract to determine whether the warranty is likely to pay off or not.