Most of us know about the myriad of insurances available: auto, home, renters, etc. The list is vast. But there is another thing that you can invest in to help protect yourself and your home: a home buyers warranty (HBW). Buying a new (or new to you) home is a stressful thing, but real estate agents and warranty companies have found a way to make this stressful time more comfortable for you. They do this by providing a backup plan in case something happens that your homeowner’s insurance won’t cover.

What is a Homebuyers Warranty?

So what is a home buyers warranty exactly? A home buyers warranty is a service agreement between a homeowner and warranty company that protects your home’s appliances and systems from accidental breakdowns due to age or mechanical malfunctions along with everyday wear and tear. This kind of warranty helps protect you from large, out-of-pocket expenses for replacements or repairs.

How Does it Work?

Warranty companies like Home Service Club make arrangements with approved service providers so that if a covered item does break, you as the homeowner can file a claim and the warranty company will take care of the rest—they will dispatch a service provider to evaluate and fix the problem. You will only be responsible to pay the small service fee that will be detailed in your warranty contract.

Your new home warranty will act similarly to an insurance plan where you pay a monthly fee to keep your warranty active. Then when you make a claim, you will pay a set Trade Service Call Fee rather than paying the full retail cost of replacing or repairing that covered item out of pocket. You are also responsible for any costs not covered in your home warranty, but those details can be fleshed out with your agent at the time of signing so that you aren’t surprised or caught off guard by any fees or costs.

What Does it Cover?

Every company’s contracts are different and they may have tiers that start with simple coverage and grow to cover far more items depending on the warranty plan. But in general, most home warranties cover major systems and appliances against breakdowns caused by everyday wear and tear or age.

The most common items you will find covered on a warranty include:

  • Heating and cooling systems
  • Electrical systems
  • Plumbing systems
  • Dryers
  • Water heaters
  • Refrigerator
  • Dishwashers
  • Stoves
  • Washing machines

More extensive warranties may cover swimming pools and septic systems.

Why Get a Home Buyers Warranty

American home buyers warranties protect new homeowners by offering reassurance. Additionally, buyers and sellers alike can rest easy knowing that any covered appliance or home system will be taken care of it they were to break or malfunction, without anyone having to pay an exorbitant amount out of their pockets.

It’s important to note that homeowners insurance generally covers events that can lead to damage, whereas warranties cover events that are expected to happen like the aging of appliances and systems. Although certain appliances may be covered under a manufacturer’s warranty, these kinds of warranties will only last for so long (such as a year or two after the purchase date). Home warranties will provide protection regardless of the buy date or age of the system or appliance.

Since home insurance is limited in its coverage, it’s wise to buy home warranty so that every inch of your home is covered and protected in the case of damage or normal wear and tear. Some warranties will cover nearly 120 different items, imagine the cash you will save yourself in the long should a refrigerator stop working, or a washing machine breaks and floods your home.

Give yourself a bit of confidence as you go into the home buying process knowing that everything is covered with a home warranty. And remember that your home doesn’t need to be under new construction to get a warranty; you can easily add this onto your existing home today!

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