Home Improvement

The Pros and Cons of Home Warranty Insurance

Many people wonder if home warranties are worth it. Learn the pros and cons of buying home warranty insurance coverage and its costs. Keep reading for all the details and then decide for yourself whether a home warranty is a solid investment.

Home Warranty Vs. Homeowner’s Insurance

Many people get homeowner’s insurance and home warranty insurance confused. Homeowner’s insurance covers a home when a natural disaster, such as wind, hail, rain, or fire damages a home. The policy also covers vandalism and theft. It does not, however, cover the systems and appliances in a home that may break down as a result of daily use.

A home warranty is a service plan that helps cover the cost of repair or replacement of major appliances and systems due to normal wear and tear. Always read a contract carefully because different items can be covered. Items usually covered include air conditioners, furnaces, ductwork, and electrical work. Appliances include refrigerators, ovens, stoves, microwaves, washers, dryers, and dishwashers.

Pros of Home Warranties

Purchasing a home warranty provides a homeowner with peace of mind. This can be especially helpful for homeowners who have just spent a lot of money on a new-to-them home. If a system, such as the air conditioner, breaks down, repairs or replacement could cost the individual thousands of dollars. Home warranty companies accept some major repair or replacement risks so homeowners can rest easy.

Home warranty companies can be convenient. Homeowners don’t need to scour the internet to find a reputable service company to call. They call their warranty company and take care of finding a repair technician that can do the job. Warranties can save both time and money.

Cons of Home Warranties

Home warranties can help mitigate repair and replacement bills, but they don’t cover everything. Individuals must pay a service call fee when something needs servicing. This fee ranges from $50 to $150, and if the problem requires more than one kind of technician, the homeowner may be required to pay the service fee to each one of them.

Some things in a home are covered as a standard feature while others may not be covered at all. Swimming pool pumps, septic tanks, and well pumps usually require additions to the plans.

Warranty companies might deny a claim if an appliance or system wasn’t maintained properly. They may ask for proof that homeowners maintained it properly. So, homeowners who did not take care of a ten-year-old furnace may not receive the warranty benefits.

Older homes sometimes have limits to how much the home warranty will pay per repair. Updating systems with code upgrades can also cost homeowners more money than planned. There are limitations as to what the home warranty will pay.

Homeowners who like to choose who is in their home and who fixes things may not appreciate a home warranty. Also, if an item needs to be replaced, the homeowner may not get to choose what brand or model the warranty company installs.

A home warranty can provide peace of mind and relieve financial stress for many homeowners. However, always check out the fine print before signing any contract.

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