The worthiness of a home warranty depends on several factors, as it can assist homeowners in safeguarding against unforeseen expenses related to appliance and system repairs.

Experienced homeowners often advise first-time home buyers that investing in repairing and replacing entire home systems and appliances is simply part of the cost of owning a home. However, a reliable home warranty from a reputable company can protect against unexpected expenses by offering a service agreement that encompasses these major home systems and appliances. A home warranty may cover many issues that homeowners insurance excludes, such as maintenance and repairs resulting from age and normal wear and tear. Nevertheless, there are limitations to what a home warranty covers, so it is crucial for homeowners to carefully read the contract to ensure they fully understand what the plan includes and what steps are required to maintain the coverage.

Should you make a purchase of an extended warranty?

Home Warranty Vs Extended Warranty

Appliance Extended Warranty

Appliance Extended Warranty is typically purchased for specific appliances or systems for a designated period by the Original Equipment Manufacturer (OEM) or its partners. These extended warranty plans are usually acquired at the time of purchasing the product from the OEM. It is important to note that the extended warranty commences after the expiration of the standard warranty and entails an additional expense.

Home warranties can be purchased at any time during the product’s lifespan and require an annual premium and deductibles for repairs. On the other hand, extended warranties involve upfront fees and do not require a deductible for individual issues. Home warranties provide coverage for used appliances, whereas extended warranties solely cover new systems and appliances. Typically, dealers offer extended appliance warranties immediately following the purchase of your appliance.

This can be done either at the time of purchase or even within your warranty period. Typically, these individuals are provided by the appliance manufacturer and possess a greater understanding and training on the appliance. On the other hand, third-party extended warranties are administered by a nationwide company. Moreover, credit card companies provide one-year extended warranties when making a payment with a credit card.

This explains the reasons for requiring an extended warranty…

Home Warranty

Typically, a builder offers a home warranty to a homeowner, which provides coverage for various essential household appliances and systems, such as refrigerators, washing machines, gas systems, central heating, and plumbing. It is important to note that if the failure of a system or appliance is due to misuse, it will not be covered. These warranties are commonly offered by third-party companies with the aim to encompass a wide range of major appliances and systems.

Home warranties encompass all the systems in your home, including HVAC, plumbing, electrical, and other significant systems. The expense is determined by the items being protected under the warranty and the deductible fee you choose. In contrast to extended warranties, home warranties do not have any age restrictions or inspection requirements, and they can be bought at any point in time. When purchasing a home, sellers, builders, and realtors may sometimes provide home warranties as an added bonus.

Home warranties are notorious for having the largest number of exclusions and charging homeowners the highest deductible. Many home warranty companies do not carry out the work themselves but instead rely on local service shops in your area as subcontractors.

Common Home Appliances That Require Home Warranty

To ensure the protection and maintenance of your home appliances and systems, it is important to have a home warranty for these 7 common items.

Plumbing

Plumbing is a crucial system that every household cannot function properly without. It can be challenging to identify and troubleshoot plumbing problems, making it necessary to hire a qualified and licensed technician for resolution. Finding a technician promptly can prove to be a challenging task. Therefore, it is essential to have plumbing included in your coverage to alleviate this issue.

Built-In Models

If a built-in appliance has a significant issue, it can be hard to fix. These appliances are electronic and are built into walls or cabinets, making it challenging to rectify the error. Additionally, these appliances vary in size, so cabinet work may be necessary to replace them. In this situation, a home warranty contract would be the most beneficial option to address the problem since the cost of replacement or repair would be very high.

Refrigerator

If your refrigerator breaks, it can be quite costly to have it repaired. Additionally, you may also lose hundreds of dollars worth of food. However, this is not the only concern if you do not have a home warranty and need to pay a large sum for the repair. There are specific home service contract companies that only cover kitchen appliances, but this may not be the best option for protecting your entire house. Nonetheless, it could serve as an additional policy. If you feel that you only need coverage for your HVAC system or do not require coverage for any appliances, it is still advisable to sign up for a kitchen plan as a minimum precaution.

Electronic Models

If your area experiences frequent power outages, fluctuations, or surges, there is a greater possibility of your electronic appliances burning out as they rely on electronic controls. The replacement of these electronic boards can be quite expensive, with some parts costing over $300 individually. Hence, it is advisable to either enroll in a home warranty or ensure that this coverage is included in your current plan to mitigate potential financial burdens.

Gas Dryers

It is important to regularly service and maintain your gas dryers with the help of technicians. Identifying a heating issue can be challenging, but with competent technicians, you can resolve these problems and avoid potential hazards. Improperly fitting gas dryers can be extremely dangerous, especially if you are considering delaying your home warranty purchase until a major disaster occurs. Regular care and maintenance are necessary to ensure the safety of your family and prevent any potential dangers.

Gas Stoves

Many gas stoves rely on electronic components for ignition and control. Occasionally, these components may require servicing or replacement due to the normal wear and tear experienced by the stove. If the issue is with a glow bar igniter, it is relatively easy and inexpensive to replace. However, control boards can be quite costly, sometimes even matching the price of a home warranty agreement. On the other hand, standard gas ranges typically require fewer repairs, as they are simple and run smoothly without needing frequent fixing. One notable advantage of gas stoves is their ability to be used during power outages.

HVAC

An HVAC is typically one of the largest appliances found in homes, making it more challenging to maintain as its size increases. Regular cleaning is necessary for these HVAC units on a monthly basis, along with an annual check-up performed by a technician. In the event of a breakdown, the expense of repairing or replacing an HVAC unit can reach into the thousands of dollars. Consequently, it is crucial for your home warranty to guarantee its continued optimal functionality. While there are plans available that solely cover HVAC units, it is recommended to purchase a plan that encompasses this and other major systems.

A Home Warranty can cover your home appliance repairs, saving you both time and money.

Home warranties provide additional coverage to homeowners for appliance and whole-home system malfunctions.

During the home-buying or home-selling process, home warranties are often discussed, but their true meaning is not always widely understood. So what exactly is a home warranty and what does it cover? The most comprehensive home warranties are designed to provide coverage for entire home systems and appliances that can experience failure due to normal wear and tear over time. Commonly covered systems include HVAC, plumbing, water heaters, electrical wiring, washers and dryers, and more. If a system or appliance requires repairs or replacement, homeowners can file a claim and will only be responsible for a service call-out fee. This helps homeowners avoid bearing the full cost, resulting in significantly lower expenses compared to not having a home warranty. It is crucial to have a clear understanding of the specific coverage provided by a particular home warranty and the situations that may invalidate that coverage. For instance, if a homeowner attempts to fix their water heater independently before filing a claim, the home warranty company might refuse to cover subsequent repairs. While it is possible to purchase a home warranty at any time, most people obtain one during the process of selling their house. A new homeowner may choose to purchase a warranty to safeguard their new investment, or a seller may include it in the contract as an incentive to encourage a purchase.

The value of a home warranty relies solely on its coverage.

Determining whether to buy a warranty and assessing the value of a warranty offered by a home seller is the most challenging aspect of the process. Jessica Fields, the vice president and chief sales officer at American Home Shield, emphasizes the importance of giving priority to the coverage of systems that have a significant impact on the essential functions of one’s home or any components that may pose safety risks, such as electrical systems. Luckily, homeowners have the option to tailor their plan and choose to include larger systems like a pool or spa.

When considering a warranty, homeowners will come across exclusions, often in small print, along with numerous details that need careful reading. These details are in addition to the paragraphs full of information that home buyers are already reading.

  • The systems and appliances that are covered by the policy.
  • The systems and appliances that are not covered by the policy.
  • The conditions under which the warranty is voided (for example, transfer of ownership, failure to maintain, attempted DIY repairs, etc.).
  • The percentage of a repair or replacement that will be covered, and any policy limitations.
  • The cost of service visits.

Following the list of covered systems, the section of utmost importance for a home buyer to peruse is the part that outlines the conditions that would nullify their home warranty. If the coverage is voided due to the previous homeowner’s negligence in cleaning or servicing the furnace over the past decade, the new warranty will not assist the buyer in replacing it. Additionally, it is crucial to ascertain whether a do-it-yourself repair will invalidate the coverage, as this will aid homeowners in deciding when to engage a contractor to evaluate problems instead of attempting quick fixes that could potentially incur higher costs in the long run.

Both a home buyer and a home seller are protected by a home warranty.

Most inquiries about home warranties mainly come from home buyers, and this is understandable. These warranties are typically targeted towards new buyers to safeguard their investment, and many sellers opt to offer them to make their older homes more appealing. However, it is important to note that sellers can also benefit greatly from having a warranty. When a homeowner decides to sell, they must make decisions regarding upgrades, repairs, and determining an appropriate asking price that takes these factors into consideration. They must also balance these choices with the expenses associated with purchasing a new home. Once these challenging decisions are made, sellers become vulnerable to the condition and performance of their home and its various systems. If something were to fail, the seller would need to address the issue by either repairing or replacing the affected item in order to proceed with the sale. In some cases, they may need to adjust the asking price. Sellers could find themselves in a precarious situation if they are unable to afford significant repairs for a major system failure that occurs while the home is on the market or worse, under a contract. As Fields explains, “In situations where potential buyers express concerns about the age or condition of home systems and appliances, adding a home service plan can facilitate the progress of the deal. Once clients comprehend the financial protection that home service plans offer for covered repairs or replacements of home system and appliance components, their worries about unexpected breakdowns due to normal wear and tear during the contract period will likely decrease.”

In general, a home warranty is worth the cost for many homeowners who want to have peace of mind when it comes to their home’s appliances and systems.

A home warranty is a great option for those who are selling or buying a home, or for homeowners who want to ensure their biggest investment, their home, is protected. Although it may be uncomfortable to think about future system failures or damages, it is natural to question the value of home warranties when everything is running smoothly. However, in the event of a significant repair, homeowners will appreciate their decision to invest in a home warranty.

Although it is not feasible to anticipate all potential issues that may occur in a home, a home warranty encompasses the necessary features for maintaining a secure and livable environment. By paying a comparatively affordable yearly premium, homeowners obtain invaluable peace of mind.

Jonathan
Author: Jonathan