With things like homeowners insurance and manufacturer warranties, it may seem like purchasing a home warranty is an unnecessary expense. After all, home warranty, insurance, and manufacturer warranty solutions are all designed to protect your home, right?
Well yes, but they don’t all offer the same level of protection, or protect the same items from the same dangers. And the truth is that if you’re depending on insurance and manufacturer warranties for your home protection, your home isn’t actually protected — at least not as protected as it should be.
If you’re wondering if a home warranty plan is right for you, consider these five points:
1. Home Warranties Cover What Insurance and Manufacturer Warranties Don’t
Although there are a number of similarities between home warranties, manufacturer warranties, and homeowners insurance (namely that they all provide a measure of protection for your home), the truth is that they are all very different things. Manufacturer warranties generally provide repair and replacement services for specific appliances and home systems — but usually only to the original purchaser, and usually only for 12 months from the date of the purchase. Conversely, homeowners insurance covers accidental damage to your property and possessions, but will not cover issues related to natural wear and tear.
Home warranties, on the other hand, pick up where insurance and manufacturer warranties fall short. By providing coverage against the natural wear and tear of key items, appliances, and systems in your home, a home warranty can help ensure that when something fails, you have the coverage to get the problem resolved quickly.
2. Home Warranties Shield for Your Budget
Your money is a finite resource, and planning out a budget is one of the best things you can do to make sure it stretches to fit your needs. But how can you budget for something you don’t know is coming? An unexpected home repair can set you back hundreds, or even thousands of dollars, potentially wiping out accounts that are intended for other things.
A home warranty acts as a defense against these unanticipated costs. By purchasing a home warranty, you’ll have a set, budgetable, recurring monthly fee. And when the inevitable happens and your home systems or appliances break down, the home warranty will be there to cover any and all repair, replacement, and labor costs. Essentially, a home warranty makes unexpected repairs something you can easily prepare for.
3. Home Warranties Take Care of the Details
When your AC fails in mid August, the last thing you want is to have to shop around and compare repair services. At the same time, hiring the first service professional you see listed in the Yellow Pages may not be the right call either. For important, time-critical repairs, you need someone good, and you need them fast.
Your home warranty company doesn’t need to open the Yellow Pages; using a network of contacts with local, highly rated repair professionals, the home warranty provider quickly locates the right person for the job, who then contacts you to set up an appointment. It’s fast. It’s effective. And it’s one less thing to worry about.
4. Home Warranties Increase Your Home Value
If you’re trying to sell your home, having an appliance or system malfunction can have a significant negative impact on your property’s market value — after all, who wants to close on a home that has a faulty HVAC (or even broken garbage disposal)? A home warranty helps ensure that all of your appliances and home systems are in tip-top shape when it comes time for prospective buyers to make an offer.
And sellers aren’t the only ones who benefit from a home warranty; listing agents and buyer’s agents also benefit, by offering an additional service designed to better serve the buyers and sellers they represent.
5. Home Warranties Cost Less
An average kitchen appliance repair costs about $1000 – $2000. The average cost of replacing a broken HVAC system can run upwards of $10,000. The point here is that repairing and replacing home appliances and systems isn’t cheap. The average American home owners spends approximately $5,000 on home repairs every year. So how much do home warranty holders spend?
Well, different home warranty companies charge different amounts for coverage, but on average a home warranty will end up costing a homeowner about $450 – $650 annually (more for expanded coverage), plus a small service fee per repair job. Simply put, if you invest in a home warranty, it will end up costing you significantly less than paying out of pocket.