Buying a first home is incredibly exciting. However, many first-time homeowners are taken by surprise by exactly how much work and money it takes to maintain a property. The problem is that no matter how well-designed an appliance or piece of equipment is, it will need repairs eventually, and most homes don’t come with a full set of brand-new appliances.
Homeowners will already be paying for mortgages, homeowners’ insurance policies, and other non-negotiable expenses. This can leave them with little money to spend on appliance and equipment repairs or replacements. That’s where home warranties come in.
What Is a Home Warranty
A home warranty is a type of service contract that pays for repairs to and replacements of covered equipment and appliances. The cost of having a home warranty is usually quite low, with plans starting at under $20/month, while the potential savings can be huge.
Every home warranty service plan is a little different. Some cover only kitchen appliances. Others are far more comprehensive, offering protection for everything from plumbing and electrical systems to HVAC equipment, and more. In all cases, they help homeowners pay for damage that occurs in the course of ordinary use.
Top Benefits of Having a Home Warranty
Some people think that home warranties are essentially extended warranties that cover multiple appliances. However, there’s more to these service plans than that. While extended warranties offered by manufacturers typically cover only damage that occurs due to factory defects or flawed workmanship, home warranty service plans are more comprehensive. They cover damage due to accidents and regular use, which would otherwise be a homeowner’s responsibility.
Having a home warranty in place doesn’t just have the potential to save homeowners money in the long run by offering free or steeply discounted repairs and unit replacements. These plans also make it easier for homeowners to make financial plans. Instead of having to worry all the time about when the next equipment failure might occur, they can simply pay a low monthly fee for ongoing protection and a service charge for each visit.
Unlike manufacturer’s warranties, home warranty coverage doesn’t run out right when it’s needed the most. Homeowners can continue to get coverage even for aging appliances by simply staying on top of monthly bills and renewing the plan each year. In other words, the money they put towards paying for the home warranty won’t go to waste just because some of the equipment is still young enough to be unlikely to break down.
Costs Associated With Home Warranty Plans
Now that homeowners understand the financial benefits of taking out a home warranty plan, they may want to get a better understanding of the costs. When working with a reputable home warranty provider, these costs will always be fully transparent and laid out in the service agreement. Most will include a monthly premium, plus a set service charge to be paid when repair technicians are called to the home. Beyond that, homeowners will need to check their service agreements. The payout cap and other relevant details will be included in these documents.
Money Isn’t Everything
Money isn’t everything when it comes to home warranties. In addition to getting a good long-term return on their investments, homeowners will also be purchasing some extra peace of mind. With a home warranty in place, there’s no need to worry about saving thousands of dollars a year to put towards unpredictable repairs.