There Are Pros and Cons to Purchasing Home Warranties

Most homes that are newly built will have a warranty from the builder which will cover the structural integrity of the home as well as the plumbing, electrical and mechanical systems. In addition, windows, appliances and other components in the home will have coverage from the manufacturer. However, if a homeowner wants coverage after the warranties have expired, they can choose from many home warranty providers.

There are a few home warranty companies that operate nationally, while others operate regionally due to regulations in individual states. Whether you work with a national or local company is entirely up to you, as is the decision whether to purchase a home warranty when the original warranties expire. Individual homeowners have to weigh the pros and cons, and the relative expense of a home warranty.

In terms and coverage, home warranties are usually sold as a contract for a specific property that can be renewed annually. As a homeowner, you may be asked to fill out a form asking about the relative condition and age of the home and its appliances. What you will most likely end up with is a flat fee rate with a deductible for any service calls.

One of the main advantages of a home warranty is that it could pay for itself with just one repair job, especially if the repair deals with the mechanical systems such as the furnace or air conditioning, the duct work, electrical systems or plumbing. These repairs can be very costly if they are not covered by a warranty. The problem will be fixed for the price of the service charge. Many homeowners feel that it is easier to call the warranty company to make arrangements for a contractor to do repairs than to have to make all kinds of calls trying to find a reputable contractor. Being able to call the warranty company to make any and all arrangements usually saves a lot of headaches.

On the other hand, if you are a prudent homeowner and do a lot of preventive maintenance on your home, you may be reducing the likelihood of your home needing major repairs. If you do not use the home warranty often enough, it can become more expensive than it is worth. Another disadvantage of a home warranty is that it will not usually cover any code violations. You will normally have to pay an additionally fee for code violations to be covered. Also, if you have a hot tub, outdoor appliances or a swimming pool, you can expect to pay extra for your home warranty.

You should not make the mistake of thinking that home insurance and home warranties are the same. You homeowners’ insurance usually covers replacement costs and repairs arising from theft, fire and/or natural disasters. Your home warranty, as was explained above, will cover the structure and equipment. You should weigh the pros and cons and decide whether a home warranty will make sense. The expense is generally $350 to $650 per year, and you can weigh that against what a plumber, electrician or contractor would charge if your home were to need a repair.