Should I get a home warranty when buying a house?

Should I get a home warranty when buying a house?

 

Whether you are a first-time homebuyer or upgrading to your dream home, finding a new house you love can be one of the most exciting times of your life. But it can also be a bit overwhelming.

One option you’ll want to consider is whether or not you should purchase a home warranty. The better you understand how a home warranty works, the easier it will be to determine whether or not you need a warranty plan and which one is right for you and your family. A home warranty goes a long way in providing peace of mind for your new home and your appliances.

Here we will dive into:

  • How a home warranty works
  • What a home warranty covers
  • Things to consider when choosing a plan

 

How does a home warranty work?

A home warranty plan is an important supplement to your homeowners insurance. It is a yearly contract with a warranty company that can cover regular appliance repairs and the replacement of covered appliances and home systems.

Costs vary based on coverage details. Generally, plans will include an annual fee and a service fee or deductible for each submitted claim. Most warranty companies allow you to choose between annual payments or monthly installments. The average annual cost typically ranges from $420-$750 with monthly payments of $35-$65. The one-time service fee goes to the repair provider and averages $100-$150 per visit.

Home warranty plans allow homeowners to offset large, unpredictable costs with a more manageable monthly payment. Regular maintenance of your home retains its value, but poor maintenance could lead to a big decline in value. Warranty plans save you money on upfront repair costs so you can afford the necessary upkeep that maintains your property value.

 

What does a home warranty cover?

A home warranty is not an insurance plan. Instead, a home warranty covers built-in appliances such as a dishwasher, hot water heater, your home’s entire electrical system, heating, ventilation, air-conditioning (HVAC) and plumbing systems. Some home warranty plans also cover innovative technology too, such as smart home systems and Amazon Alexa integrations.

All plans are different and each can be modified depending on existing coverage or your budget.

Additionally, a home warranty company protects your appliances long after their standard warranty expires. So, think of your homeowners insurance policy as protection from the costs of the major disasters that we all hope won’t happen anytime soon (i.e., theft, major storm damage, someone getting injured on your property, etc.), but think of your home warranty plan as protection from the mishaps and malfunctions from normal wear and tear that impact the essential appliances and systems you depend on every day.

 

How you know if you need a home warranty?

A home inspection is one of the most important home buying steps and is key in determining the type of warranty plan that will be appropriate for your potential new home. Inspections help you confirm the property’s valuation, predict what might need repair or upgrade, and gives you confidence that, once you are the homeowner, you are getting what you paid for.

But home inspections don’t routinely assess appliances. A standard home inspection covers structural components and primary home systems (HVAC, plumbing, electrical). Home inspections aren’t required to assess the wear and tear on your appliances, so a home inspection cannot inform a new homeowner about appliance lifespan.

One benefit of buying a home warranty plan is that it covers you for the things your home inspection might overlook and the items your homeowners insurance policy does not cover. Cinch Home Services can provide insight into what plans would work best for any new home.

Investing in a home warranty plan will also connect you to a qualified repair service, so you won’t need to worry about finding a trustworthy provider when the time comes. If you’ve moved to an entirely new part of town or new city altogether, the home warranty plan saves you the stress of seeking out a reputable repair service in your new neighborhood. Most companies will have thousands of pre-screened, qualified service partners to recommend, and with this recommendation usually comes a guarantee on their work.

 

Finding the right plan for you

To determine whether a home warranty plan is right for you, make sure you collect the following details about your appliances:

  • What make, model and year are the appliances?
  • Are the appliances still under a manufacturer’s warranty or has it expired?
  • Have the appliances been repaired or had replacement parts installed?
  • What is their general condition? Regular wear and tear or very well-used?

Next, review the service fees and service contract options between warranty plans. Since each home can have a wide range of appliances and home systems, plans vary. Each warranty company will offer several options based on the kind of appliances you own and the type of coverage you are looking for.

If all the appliances in your new home are at risk for repair or replacement in the next few years, the small monthly service fee on an annual service contract will be small compared to the cost of repairing or replacing one or more of your essential appliances outright.

Plus, keep in mind that major appliances typically report issues when they are only 2-5 years old. So even if all the appliances in your home are relatively new, a warranty plan could still save you money in the long run.

A home warranty plan is a peace of mind that all homeowners should consider. It can also be a simpler way to combine the warranty or insurance policies that your individual appliances would come with. This way, you can more easily keep track of potential maintenance costs. A home warranty may protect you from steep repair or replacement costs, and can save your family loads of stress. Plans with companies such as Cinch Home Services can be tailored to complement your homeowners insurance policy and protect the appliances and systems in your home.

When buying a home, you’ll want to consider whether or not you should purchase a home warranty. Visit our site to learn more.