Reasons For Purchasing a Home Warranty

What is a home warranty? It is a service contract covering a year, which helps protect the owners of homes from expenses on unexpected replacement and repairs on major home systems and appliances that break down which are not covered by a homeowner’s insurance.

Warranties have become more popular because they provide protection immediately after home purchase. This kind of warranty also covers structural and other defects of a new home or a resale. Some warranties may have specific exclusions and limits that make the policy difficult, unless the defect poses a threat to the safety of the family living in the house.

There are many reasons why purchasing a home warranty is a good idea:

1. For a seller, listing the home with warranty could be the concession that draws the buyer to the home rather than to one who do not have a home warranty.

2. It provides a seller provision to have coverage on their home during the sale period. This is a great benefit of a seller when unexpected breakdowns occur on warranted items.

3. For the homebuyer, it could mean an extra insurance to their home inspection. A knowledgeable buyer will understand that a seller providing a warranty prior to closing can offset mechanical surprises.

4. Home warranties go hand in hand with home inspections. It can lessen the probability of future stress to the homeowner.

5. It covers up to a year and is renewable. It covers some of the components of a home and you can get additional coverage for your water heaters, appliances, electrical, plumbing, pools, heating and air, wells and roofs.

A homeowner can save thousands of dollars by simply paying a small service fee in the event that something requires replacement or repair. Many insurance companies sell home warranties. When shopping for the best one for you, it is important to ask many questions including deductibles.

These days, the cost of living could cause enough worry without the added stress on unforeseen issues in a newly acquired home concerning breakdowns and mechanical problems. Investing in a home warranty is indeed one of the wisest decisions you will make regarding your real estate. When the plumbing or heating system fails, the cost can be quite staggering. When moving into a new home, nobody wants to face costly bills on sudden repair. This worry can be eliminated with a home warranty. When selling your home, you would want things to go smoothly in your transaction. A warranty could protect you and increase your chance of a successful sale. This will not only provide you peace of mind but will also make you feel good with the knowledge that you are providing the new home owner with maximum protection as well.

Make it a point to read the home warranty plan presented to you in order to assure that the items you wish to seek coverage are listed. The average cost of a home warranty ranges from $350 – $600 annually, depending on the coverage level. It is an affordable and a very good investment for both sellers and homebuyers.

Benefits of Home Warranties

If you are like many new home buyers, you are probably asking yourself, “What is home warranty insurance and why should I have it?” Many people believe that their homeowner’s insurance is sufficient protection from unexpected expenses. Unfortunately, this is simply not the case. There are many features of the home to consider and even more circumstances where your homeowner’s insurance just doesn’t cover it.

First of all, home warranty covers the breakage of many major systems in the home. Appliance insurance is also an added coverage of a home warranty. A standard homeowner’s warranty insurance package will include most major appliances, such as kitchen and laundry. Also, major systems, including heating and cooling, and water heaters should be covered. In addition to mechanical systems and appliances, you can purchase coverage for your roof, electrical systems, gas fireplaces, hot tubs, pools, septic, and well pumps, to name a few. You can work with a home warranty insurance company to get coverage for all of the things around your home that you deem necessary. If you have some appliances that are new and it is unlikely they will break or they are already covered under a manufacturer’s warranty, you probably don’t want to waste money covering these items. However, as systems around your home age, it is wise to get coverage for them in the event that they stop working.

Some homebuyers may think the type of residential property they are purchasing may not be eligible for homeowner’s warranty insurance, like a duplex or other multi-family unit. And if these people are buying for the purpose of renting out, they may think that the renter’s insurance will cover everything. However, this assumption could not be more inaccurate. If you are thinking about becoming a landlord, you will be required to provide many or most of the appliances and are responsible for all repairs on the home, unless expressly caused by the tenant. Normal wear and tear, aging appliances and major household systems are the most likely situations that you will face and need to address as a landlord. So, being covered by home warranty insurance is the smartest thing you can do for your investment property.

Not being able to take care of broken appliances and home maintenance repairs promptly due to a lack of money or time could result in the loss of your tenant, which would leave your property and pocketbook sitting empty. Since homeowners warranty insurance ensures that the repairmen are prescreened, you won’t have to waste time finding one. The servicemen are usually dispatched immediately and their work is guaranteed. Not to mention, you will only have to pay for a small service charge out of pocket, rather than the cost of the actual repair, labor and parts. These benefits, when combined with the convenience of only having to talk to your representative from the warranty company, makes buying homeowner’s warranty insurance coverage for your rental property a no-brainer.

Home warranty insurance packages are easily customizable, making them perfect for any homeowner or renter’s needs. You can get basic coverage, which is usually very comprehensive, or add additional items you may be concerned about. Any way you choose to build your homeowner’s warranty insurance, you’ll be glad you made the decision to purchase it after the first time you need to use it.

Is a Home Warranty a Home Buyer’s Best Bet?

Many times, you are bound emotionally to the house that you are about to buy. So there might be lot of things to which you would not have paid attention, especially about the way the home appliances have been maintained. In fact, there have been instances where after buying the house, the buyer has realised the breakdown of appliances due to normal wear and tear. That is why, home warranties become so important especially when you are buying a house.

As you may know, a home warranty is a service contract to protect your major home appliances. A house for sale with an appliance warranty plan is definitely more attractive for the prospective buyer as it gives a sense of security. The age of the house or the home appliances does not matter as long as they have been maintained well and are covered by the home warranty.

While buying the house, as a buyer, you should clearly know the difference between a home appliance warranty and a home insurance. A home insurance is for natural disasters, theft or burglary. A home appliance warranty is for the home appliances that break down due to normal wear and tear. Many a times, a home warranty helps you to avoid high repair costs especially during and after the sale of the house.

Usually, home warranties are purchased for a year and can be renewed annually. Before buying a home protection plan, it is necessary that you conduct some research on various companies, what are covered and what are not covered, premiums offered by each company and so on. There are lot of reviews and user experiences available on the Web which you can read and understand. Also, some websites provide ratings for the warranty companies. Ensure that there have been no customer complaints about the company from which you are planning to buy the home service contract.

It is very common that a seller normally pays for your home warranty as it serves as an incentive. The seller does this willingly especially if you have bought the house at a higher rate than the market value. The real estate agent plays a pivotal role in promoting home warranty along with the sale of the house.

So, a home warranty definitely acts as a security and induces lot of confidence in a buyer while buying a house, irrespective of the factor if it is new or old. When a home warranty guarantees you so much, why not ensure that you get it while you buy a house?