What is home warranty?
A home warranty is a service contract between a homeowner and a home warranty company that provides for repair or replacement of major components of a house such as the HVAC, furnace, plumbing, and electrical that fail due to age and standard wear and tear. It reassures a homebuyer and provides the seller with a measure of protection against complaints about home defects that arise after the sale closes.
A home warranty may also cover major appliances such as washers and dryers, refrigerators, and swimming pools.
A home warranty is different from home insurance. Whereas a bank will generally require you to obtain home insurance before issuing a mortgage, home warranties are not mandatory to obtain a mortgage.
A home insurance policy covers any accidental damage to your home and belongings due to natural disasters like storms, fires, and theft. A home warranty covers for repair or replacement of major components of your systems and appliances.
Do you need a home warranty?
A home warranty provides protection against expensive, unforeseen repair bills and provides homeowners with peace of mind. It can serve as a buffer for a homeowner who doesn’t have an emergency fund and provides convenience so you don’t have to worry about finding a contractor when problems arise or repairs are needed.
It works like this: If your washer stops working, you will call your home warranty company and tell them about your issue. They will dispatch a licensed and qualified service technician to evaluate the problem. Assuming the problem is because of wear and tear or another circumstance covered under the terms of your service contract, the technician will either make the repair or replace the appliance for only the cost of your service call. Each visit from a service technician typically costs between $75 to $125. Compare that to the actual repair cost or potential replacement of the concerned appliance, you can save hundreds or even thousands of dollars.
Home warranty plans typically have 12-month contract terms and can be purchased for around $50-$75 per month, with add-on coverage for items like roof leak repair or pools for an additional cost.
Ready to get your own home warranty? Watch the video below, and find your ideal home warranty plan today.