Do I Need a Home Warranty Plan?

A home warranty is a contract that you can purchase that guarantees the repair or replacement of certain appliances or systems in your home. Home warranties, also known as residential services contracts, are available for both newly constructed homes and existing homes. Many home owners opt to purchase a home warranty plan in order to protect themselves against the cost of future home repairs and to provide them with peace of mind. Home warranties can be can be purchased from your local insurance dealer or from private home warranty companies.

Existing Home Warranties

Existing home warranties cover buyers of homes that were preexisting at the time of sale. These warranties can be purchased by the buyer of the home in order to protect against future repair and replacement costs, for a period of up to one calendar year. Alternatively, they can also be purchased by the seller of the home and included with the sale, as a purchase incentive. These existing home warranties cover repair and replacement costs of items including:

• major appliances




• heating and cooling systems




• plumbing




• wiring




• ductwork

How Much Do Home Warranties Cost?

Home warranty costs fluctuate depending upon the type of coverage you have and the warrantee company you are using. There are typically three costs involved in your home warranty:

Initial Purchase Cost:

To purchase a home warranty plan that covers one calendar year, it typically costs between $250 and $400. This provides repair and replacement coverage for all standard appliances and household systems. If you have bought a newly constructed home, the initial cost of the home warranty will be included in the price of your home.

Extra Coverage Costs:

Extra coverage (for items like pools, spas, and trash compactors) can be purchased at an additional cost. These items typically cost about $30 per year to cover under a home warranty.

Co-payment Cost:

All existing home warranties require the home owner to pay a deductible every time he or she makes a claim. This deductible is used to pay the repairman or contractor who repairs or replaces the damaged item. Co-payments typically run from $30 to $50 per claim.

Benefits of Purchasing a Home Warranty

There are a number of benefits to purchasing a warranty for your home, whether you are buying or selling.

Benefits for Sellers:

A home warranty plan often helps to entice reluctant buyers into making an offer on a home. They are also relatively inexpensive and don’t have to be paid for until the closing date on your sale.

Benefits for Buyers:

Home warranties can offer great peace of mind, especially if you are buying a home that is more than ten years old. Home warranties can save you from having to pay replacement costs for old appliances or heating and cooling systems. And if you can’t afford to buy one yourself, you can use it as a bargaining tool when making an offer on a home.

Where Can You Get a Home Warranty Plan

As a real estate developer, investor and vacation rental home business owner, I use and recommend the Home Warranty Plan from Zurvita Home Guard. Your home is usually your largest investment. Maintaining a home can be an enormous expense. With Zurvita Home Guard you enjoy convenience, savings, and peace of mind knowing that if something breaks down you are protected.

Brent Vanderstelt is a real estate developer and vacation rental business owner and owns and manages Your Travel Buddy Vacation Rentals, a Free Vacation Rental Listing Service.