Are you buying a previously owned home? Then hopefully you have some financial reserves at all times to handle buying a new stove or repairing your new home’s 18 year old furnace suddenly if they should break (because they will and at the most annoying and inconvenient times!) Repairs are an inevitable part of living in a home, regardless if you own or rent one. Appliances break, faucets leak and heating and cooling units can call it quits in the middle of a cold spell or heatwave. Rather than depleting your savings for these repairs, some homeowners opt to purchase home warranties to alleviate the cost of common home repairs.
But, are home warranties worth it? It can be extremely frustrating when an appliance or home system breaks down shortly after you’ve moved into your new home. But is it really worth $350-500 a year to cover your newly purchased home? I mean, isn’t that what home insurance is for? Or is that different??? Learn more about what a home warranty is (and why it’s not home insurance), when someone should purchase it and whether a home warranty is right for your home….
A home warranty is an optional, renewable home service plan that offers discounted repair and replacement services for applicable household appliances and systems. Contracts and terms may vary, and coverage and cost depends on the type of warranty that you purchase. It does not provide the same coverage as homeowners insurance, which protects policyholders against damage to personal property and the home’s structure, such as fire damage or theft.
How do you know if you need a home warranty? If it’s included, take it. But before you take the plunge and buy a home warranty, make sure your systems aren’t already covered first. Newly constructed homes are covered by manufacturer warranties. Your agent may be able to negotiate a 1-year home warranty into the purchase agreement as part of the sale that you can choose to continue or cancel when the year is up.