To Home Warranty Or Not

Dated: 03/11/2019

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What is a home warranty and should you get one?   

A home warranty is not the same as homeowners insurance.   Home insurance is for major damages that may be caused by things like property crime and bad weather (that could be hail, a hurricane..etc).   A home warranty is for specific mechanical functions of the house like plumbing, HVAC, electrical, water heaters, etc.  There is typically a general list of what is included and you can pay more to add additional covered components like the roof, pool, spa etc.   Keep in mind though, the home warranty doesn't "cover" these items - but instead discounts the cost of repairing or replacing the item.  Typically, you would pay about $100 for a service provider (approved by the home warranty program) to come out and make the repair or replacement as needed.  

As you can already see, there are some pro's and cons to having a home warranty...

PROS: 

- Peace of mind for major systems that may not have been able to be fully tested during a home inspection (ie. the air conditioning during winter)

- Peace of mind for major systems that are older or past expected life. 

- Helpful for those looking to buy a home but not budgeting for potential issues within the first year of home ownership. 

- Helpful for those who are not handy for around the house fixes that do not necessarily require a licensed professional. Image title


CONS:

- Warranties last for 1 year and then need to be renewed

- Home warranties have a lot of fine print - and the item that breaks may not even be included for multiples reason (ie item was installed incorrectly may exclude the item from the home warranty)

- Keep in mind the warranty will limit which service provider you can choose

- Not all home warranty companies coverage is the same. Do your homework before deciding which company to choose. 

- Home warranties are expensive.  Typically 500-550 initially and then annual renewal fees. 


In the end, there is no true price for peace of mind - but beware of the warranty coverage limitations.  


Blog author image

Kat Royer

Kat Royer is a graduate of Virginia Tech with a Bachelor’s degree in Hospitality and Tourism Management and minor in Real Estate. She worked for 7 years in operations and sales for a major internat....

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