Buying a home isn’t something that a person takes lightly. Purchasing property requires hundreds of thousands of dollars or more, which is a lot of money to invest. People worry about covering their mortgages and handling unexpected expenses. Homeowner’s insurance is required to cover the property’s structure and homeowner’s personal property if damaged or stolen in emergencies like theft, fire, and other disasters.
However, homeowner’s insurance does not cover system or appliance failures from normal wear and tear. Homeowners need to consider purchasing a home warranty by Choice Home Warranty to cover systems and appliance breakdowns. Such coverage can protect against substantial out-of-pocket expenses.
What Is a Home Warranty?
A home warranty is a convenience product. It is not meant to replace home insurance, but rather, it complements it. A warranty might not be a good fit for you if you’re purchasing a brand new home. That is because almost everything from top to bottom will likely be covered by manufacturer and builder warranties. However, if you go this route, don’t completely rule out a home warranty. Instead, do some research on your guarantees to see the coverage.
Meanwhile, if you’re getting a pre-owned home with used systems and appliances, a home warranty could be perfect. If a big-ticket item goes down and you don’t have warranty, the cost of fixing or replacing it will fall squarely on your shoulders, and it probably won’t be cheap. For instance, the national average for an HVAC replacement is $8,267.
But, with a home warranty, you’ll purchase the initial plan for between $400 and $500. Then, whenever a repair or replacement is needed, you’ll spend somewhere between $60 and $125 on a service fee. As you can see, that is significantly less than paying to replace an HVAC unit outright.
The Length of a Home Warranty
So, how long is a home warranty good for? The length of home warranty plans vary. Some companies offer two- to three-year plans. However, most contracts only last for a single year. Then, the holders can let them lapse or renew them. Before choosing the latter, just keep in mind that there’s no telling when a failure might occur. Hence, think long and hard about the decision because a disaster could drain your checking or savings account.
For example, what if your water heater tank bursts one day after you get rid of the warranty? The average cost for a water heater installation is between $800 and $1,600. If you need a tankless water heater replaced, the price will be closer to the $3,000 level. Renew your home warranty annually, or as needed, to prevent yourself from having to spend an arm and a leg when a catastrophe strikes.
Typical Appliances and Systems Covered by Home Warranties
Not all home warranties provide the same coverage. That just means some may cover certain things while others don’t and vice-versa. Thus, you should research plans thoroughly before buying to make sure you find the right one. Most warranty plans cover electrical and internal plumbing systems. The policies typically handle ductwork and heating problems as well.
A home warranty generally covers appliances like:
- Water heaters
- Air conditioners
- Garbage disposals
- Ranges, stoves, and ovens
With systems and appliances like these covered, a home warranty can certainly save you some money when failures happen. If you don’t already have one, you might want to strongly consider obtaining a plan today. The investment could prove to be well worth it in the end.
Home warranties cover different systems and appliances. They also last for varying increments and have differing price tags. So, do your homework and ensure you know what you’re getting into. But once you pick a perfect plan, you can rest easy, knowing that if something goes wrong in your home, you won’t have to break the bank to deal with the mishap.