An unexpected breakdown of your home’s major appliances or systems can be a stressful and costly experience. Whether you’ve recently moved into your dream home or have been living in one for years, the financial impact of repairs or replacements is something many homeowners are unprepared for. Thankfully, a home warranty can help bring peace of mind.
Key highlights:
Home warranties can offer financial protection
A home warranty helps cover the cost of repairs or replacements for essential home systems and appliances (like HVAC, plumbing, and kitchen appliances), reducing the risk of large out-of-pocket expenses.
There’s a claim process with deductibles
Homeowners choose a plan, file a claim when a covered item breaks, and a technician is sent for repair or replacement. Each claim typically involves a deductible, which is paid per service call, similar to insurance, but coverage is limited to breakdowns from normal wear and tear.
Home warranties may be valuable for older homes
A home warranty plan can be especially worthwhile for older homes or rental properties with aging systems, and can also be a strong selling point in real estate transactions.
A home warranty is a contract between a homeowner and a company that helps pay for repairs and replacements on covered appliances or home systems. Think of it as a financial safety net to help you avoid large out-of-pocket costs. These contracts are designed to ease the burden of unexpected repairs, covering many items you rely on daily, from air conditioning units to refrigerators.
How does a home warranty work?
The process of a home warranty is fairly straightforward.
Here’s how it works:
- Choose your plan: Select a plan that meets your specific coverage needs. Some plans cover appliances, others focus on built-in systems, and comprehensive plans cover both.
- File a claim: When a covered appliance or system breaks down due to normal wear and tear, you can file a service request.
- Get professional help: A pre-screened service technician visits your home to diagnose the issue. If repair isn’t possible, the item may be replaced.
- Save money: Instead of paying hefty repair bills from your own pocket, your warranty helps reduce the financial strain.
According to ConsumerAffairs, households in 2023 spent an average of $4,000 on maintenance and emergency repairs. Home warranties play an important role in mitigating these costs. If you don’t have protection in the form of a warranty, you can be spending thousands of dollars just to maintain or fix your routine appliances or systems.
Do home warranties have deductibles?
Yes, deductibles are typical with home warranty plans. They are similar to an insurance deductible, which is the amount you must pay when you utilize the service. In home warranties, the deductible is the amount you have to pay when making a service request on a covered repair or replacement.
The deductible is collected at the time of a service request and occurs on a per-claim basis. It
does not include any non-covered charges, which may include junk removal for broken appliances. It also doesn’t cover any amounts over caps and limitations that may apply.
Related Article: Home Warranty Deductible: Breakdown and Guide
What does a home warranty cover?
A home warranty typically covers major appliances and home systems that are integral to your daily life. Coverage varies by plan but often includes the following:
- Appliances (e.g., refrigerators, ovens, dishwashers)
- Heating, Ventilation, and Air Conditioning (HVAC) systems
- Plumbing and electrical systems
- Washing machines and dryers
Coverage is limited to issues caused by normal wear and tear and mechanical failures. For instance, if your dishwasher motor breaks down, it’s likely covered. However, items like cosmetic damages, structural components (e.g., walls, roofs), or improper installations typically aren’t included.
What’s not covered?
Home warranties don’t usually cover pre-existing conditions, cosmetic damage, or neglect-related failures. Other exclusions may include small appliances such as coffee makers or damage caused by pests or weather events. Always review the contract details to understand coverage limits and exclusions.
Home warranties are distinct from both manufacturer warranties and homeowners insurance:
- Manufacturer warranties: Cover specific defects or faulty manufacturing, usually for a limited time and only for new appliances or systems.
- Extended warranties: Extend a manufacturer’s original warranty but apply only to a single item, making it costly if you want coverage for multiple appliances.
- Homeowners insurance: Protects against damage from events like fires, theft, or natural disasters, but doesn’t cover mechanical breakdowns.
A home warranty complements homeowners insurance by filling gaps that the latter doesn’t cover, such as mechanical failures of aging appliances and systems.
Is a home warranty worth It?
A home warranty can offer tangible value, especially for homeowners with an older home or aging appliances. Here are the primary factors to consider:
- Appliance and system age: Items with significant wear and tear are more prone to breakdowns, making a home warranty an excellent investment.
- Emergency fund: If you don’t have substantial savings dedicated to unexpected repairs, a home warranty can be a budget-friendly safety net.
- Rental properties: For landlords juggling tenant needs, warranties ensure quick resolutions to keep tenants happy.
- Location: Homes in extreme climates can experience accelerated wear and tear, making a warranty even more critical.
For example, unexpected HVAC repairs on an older home in a hot climate could cost thousands. With a home warranty, you could pay as little as just the deductible depending on plan terms, sparing you a hefty expense.
Home warranties benefit both buyers and sellers
Home warranties can appeal to both buyers and sellers:
- For buyers: Offers reassurance when purchasing a home with older appliances or systems.
- For sellers: Adds value by providing potential buyers with peace of mind about unexpected repair costs.
How to choose the right home warranty
Selecting a home warranty plan aligned with your needs is essential. Here’s what to consider:
- Coverage needs: Decide whether you need coverage for just appliances, just systems, or a comprehensive plan for both.
- Exclusions and limits: Understand what’s not covered and any caps on repair costs.
- Provider reputation: Research trusted providers like Cinch Home Services, which boasts 45+ years of experience and award-winning customer satisfaction.
Consider these factors carefully to ensure you’re maximizing the value of your plan.
Simplified homeownership with Cinch Home Services
With over 45 years of expertise and millions of claims handled, Cinch Home Services offers comprehensive solutions tailored to the unique needs of every homeowner. Whether you want coverage solely for appliances, systems, or a combination of both, our three plan options deliver peace of mind and financial protection.
Disclaimers:
- The product being offered is a service contract and is separate and distinct from any product or service warranty which may be provided by the home builder or manufacturer.
- Subject to plan terms and conditions.
