What Do You Need to Know About Home Warranties
When you own a home, you know that the financial commitment goes well beyond your monthly mortgage payment or homeowners insurance premium. There are other costs you must commit to if you want to make your house a safe, comfortable place and one that will meet your needs. Upkeep and maintenance will keep your house looking nice and will ensure that systems and appliances work properly. Over time, however, items at home will break down and require repairs or replacement. You could spend a lot of money paying a professional to fix these things or buy new ones. Fortunately, there is a way to get around these costs: purchase a home warranty for your Texas home. By making a one-time payment, you can avoid expensive repairs and service calls that could otherwise turn your budget upside-down.
A Few Thoughts About Homeowners Insurance
Some people confuse homeowners insurance and home warranties, but there are differences between the two. Insurance is required to secure a mortgage loan. It covers your losses in the event of an emergency or catastrophe such as a fire, wind damage, falling debris, theft, and vandalism. A homeowners insurance policy does not cover flooding or earthquakes, so you would need to buy supplemental coverage if you believe you are at risk of those events.
Understanding a Home Warranty
A home warranty is an agreement you would make with a service provider to repair or replace systems or appliances that stop working in your home. You pay a fee, and the provider agrees to evaluate the issue and take care of it at no additional out-of-pocket costs to you. Warranties last a year, and you can renew them annually. It will cover unforeseen repairs as well as those needs that arise due to normal wear and tear. If you purchase a brand-new home, the builder will likely provide a one-year warranty. After one year, you can purchase another warranty. If you buy an existing home, it may make sense to buy a home warranty at the time of purchase. Warranties typically cost between $30 and $50 a month, though you can also pay the fee annually. You will also have to pay a service fee of around $100 for each incident.
What It Doesn’t Cover
A warranty won’t handle all repair and replacement needs. If you deliberately break or destroy something, a warranty won’t take effect. This is the same with homeowner’s insurance. You also can’t expect coverage if you misuse the products or fail to keep up with routine maintenance and care.
What Appliances and Systems the Warranty Covers
Your home warranty would protect you from having to pay for costly repairs to all appliances and systems in your house. These include your refrigerator, oven, stove, built-in microwave, dishwasher, washer, and dryer. It will cover your home’s HVAC system, including the furnace and air conditioner. Your warranty may also apply to the sprinkling system, garbage disposal, plumbing, roof, and swimming pool (if you have one).
Repairing appliances can be expensive. Replacing them will usually be even more costly. Fixing an HVAC system, for example, can cost hundreds or even thousands of dollars. Installing new plumbing can have similar costs. Even replacing parts in kitchen appliances can run a few hundred dollars. Your home warranty costs may be less than repairing a single appliance. This can save you money and stress during an unexpected time. A warranty provides peace of mind that you will be able to afford to make necessary repairs even when money is tight.
It may not always make sense for you to get a home warranty. One thing to consider is that when you have a warranty, you don’t get to choose who fixes the items. The warranty company has a contract with certain providers, and you may or may not like the work or service they perform. Some homeowners find that the service technicians are not always timely, so you could be waiting days or weeks for your appliances to be working properly. Some plans also have a limit on how much they will cover per repair job.
Making the Decision
If you have older appliances and systems in your home, chances are higher that they will not be working at peak efficiency much longer. Having a warranty, in this case, might make sense. If you don’t have much extra cash in your savings reserves, a home warranty can be helpful during a time of need. Also, if the manufacturer’s warranties are still in effect on your appliances, or if you’re handy and can fix them on your own, it may not be worth it to purchase a warranty.
If you’re a homeowner, it’s helpful to understand how a home warranty works. Evaluate the pros and cons so you can make the right decision for your needs and goals.