Home warranties are protectors to homeowners when repair costs are not covered by home insurance. The type of repair costs that might not be covered under your home owners insurance is such things as the plumbing, heating, air conditioning, roofs, and major appliances. Home warranties on the other hand are an added protection against the unknown.
Home warranties are similar to service contracts and typically last one year. Home warranties do not replace homeowner's insurance policies; instead they work together and back each other up. For example, your hot water heater burst and there was considerable damage to several walls in your basement as well as your hot water heater needing to be replaced. The homeowners insurance will cover the damage to your walls and the home warranty will replace the hot water heater. Having both homeowners insurance and a home warranty contract your basement will soon be fixed without you having to take out a loan. You will have a yearly premium for your home warranty which will vary depending on what type of home warranty you choose.
The warranty coverage does not have to be on a new home, in most cases the age of your home will not matter. As long as the covered items in the warranty are in good working condition at the start of the contract it does not matter the age of the items. If your home is in good condition then there might not be a need for a home warranty and you can save the extra expense. Just remember those surprises are usually what causes us the most money. Home warranties have a yearly expense and a service call fee per call. One failing refergerator is worth more than what a home warranty contract is for one year.
When you decide to obtain a home warrant the premiums can be added into your mortgage. Most home warranties are not very expensive. Premiums usually cost about $350 to $500 a year. You will have a service call that is anywhere from $35 - $50 per call. These home warranties can be purchased at closing from the real estate companies. Right at the moment since sales are low in the housing industry some real estate agents are giving one year policies to new home buyers. Home warranties are offered and available to everyone regardless of the age or condition of your house.
As with everything there are the base plans and the premium plans. Premium policies run $150 -$200 more a year and the service call maybe slightly lower. If this is your first time purchasing a home warranty or even if you have had several warranties always do your homework and read the contract thoroughly.
Ask for a complete copy of the contract before you sign and review it with a fine tooth comb. Check to make sure that the appliances and systems that you are most concerned about are completely covered. Make sure there is available service where your house is located. Some warranties do not offer service in rural or even semi-rural areas. If need be call a customer service representative to see what loop holes are in the service availability or response time if you live in a more rural area. An extra charge may be applied for the area that you live in. While speaking to a customer service representative also ask if there is a waiting period or if the contract is taken out January 1 and the stove goes out on January 2nd is it covered? Most generally this is the case and the only thing that you have a waiting period on is 30 days for rust and corrosion.
A home warranty is well worth the $350 - $500 premium per year whether you have a brand new home or an older home. Brand new appliances do not last nearly as long as they use to so if you have new or older appliances then it more than pays for itself if just one appliance goes bad over the year you will have gotten your money out of your warranty. As appliance costs rise every year it is crucial that homeowners protect themselves from this financial burden should a covered item need repaired or replaced.
Home warranties are transferable once a home sells. This brings a level of security to the home's sale. According to real estate experts a house with a home warranty in place sells faster than a house without one. Many new homeowners have already overextended themselves so if the house already has a warranty in place then people do not have to worry about having more money to put out than they were expecting. As a home owner or as a buyer, peace of mind is what you will receive with a home warranty.
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