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Things To Consider If You’re Thinking About Purchasing a Home Warranty

If you’re in the process of buying a home, it’s likely that the term “home warranty” has come up. Some homes may come with a home warranty included in the purchase, while other homes will not.  We are here to share some details with you regarding home warranties and some things to think about if you are considering purchasing one.

A home warranty is a service contract that covers repairs and replacements of electrical, plumbing, heating & cooling systems, major appliances and miscellaneous structural and mechanical components in the event of failure from standard usage and aging issues.  There are many home warranty companies out there that offer a variety of packages at different price points that depend on what is included in the plan. Most plans are annual, and there are a variety of plans available to suit various homeowner needs.

Do I need a home warranty?  

If you’re wondering if you need to purchase a home warranty, ask yourself the following questions:

Q: How old is the home?  How old are the mechanical systems and appliances in the home?

A: If you’re purchasing a new construction home, you will likely not need to purchase a home warranty, as there will be a builder’s warranty on the home itself and manufacturer’s warranties on all the systems and appliances in the home. However, if the home and it’s systems and appliances are older, you may want to consider one.

Q: Do I have time for DIY repairs?  Do I have a trusted contractor who I can call for repairs? Am I able to afford costly repairs in the event of a major break or issue?  

A: If you answered “no” to any of the above, then you may want to look into a home warranty.

How do I find a home warranty provider? 

If you’re thinking about looking into a home warranty, Angie’s List is a great place to begin your search to find providers and quotes for home warranty policies in the Raleigh, NC area.

What do I need to look for when I’m shopping for a home warranty?  

As you consider purchasing a home warranty, you will want to evaluate whether it covers exactly what you want it to cover.  Always be sure to read ALL of the terms and conditions carefully and confirm the following:

  1. Are there limits on what the plan will pay out for the duration of the policy?
  2. What are the terms for repair / replacement of  broken items? For example, some plans may cover the hot water heater, but not the tank itself; or, it may cover the refrigerator, but not the ice maker, and so on.  Appliances may not be covered if they break due to a power surge or due to user error. There may even be a term in the policy that allows the provider to deny coverage if there is a pre-existing condition (even if it was unknown to you at the time of purchase).

Another thing to keep in mind is that if you purchase a home warranty, you will pay a monthly / annual premium, and you will still have to pay some repair / replacement costs up front.  It is similar to a home or auto insurance policy where you pay a premium and also a small deductible in the event of an unexpected and unfortunate occurrence.

If you’re unsure about purchasing a home warranty policy, a possible alternative is to self-insure and put the money that you would be spending on a home warranty into a savings account dedicated to product repair or replacement. This way your money stays with you and you will only spend it if you need to.

Please feel free to reach out to us by commenting on this blog or message us through our website or Facebook page if you would like to connect and get more information on home warranties and other related products and services.  We would love to hear from you!

 

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