It is National Home Warranty Day! Just like National Cut Your Energy Costs Day, this one is about your biggest investment-your home. Perhaps you’ve heard of home warranties, but aren’t exactly sure what they do. Sometimes sellers offer a home warranty with the purchase of their home. People seem to have a love-hate relationship with home warranties; read on to decide if one is good for you.
What is a home warranty?
A home warranty is a contract between yourself and a home warranty company that covers repairs on appliances and systems that have been well maintained in your home. Each contract usually lasts one year and you purchase it.
There are many companies that offer home warranties. As a consumer, it is important to look into all your options to decide which warranty meets your needs. The warranties typically cover your electrical, plumbing, HVAC systems, and appliances and can be customized depending on what you have in your home.
For example, if your refrigerator breaks, you can contact your Home Warranty company. They will try to repair the refrigerator before replacing it. Just make sure you are aware of any deductibles, trade call fee, or caps that may be part of your contract. These are out of pocket expenses that you pay.
Do I need a home warranty?
Deciding to invest in a home warranty is an individual decision. You have to consider the cost of the policy plus any trade fees, deductibles, or caps that are in place versus your likeliness to use the warranty. Since no one has a crystal ball that can predict when your oven is going to break, you may pay for a warranty and never use it.
On the other hand, if a big ticket item in your home breaks and the warranty can be used to repair the item, the warranty may pay for itself. Keep in mind that you will have to use the home warranty’s company repairmen to inspect and repair the broken appliance.
If you buy a house and it comes with a warranty that is an added bonus for you! If you want to consider purchasing one, just put some research into it. Make sure to use a reputable company and read all of the contract so that you completely understand what is and isn’t covered and all of the terms of your contract before you commit.
