Today, the home buying process usually includes purchasing a home warranty. Home warranties can provide additional financial protection for major home appliances such as plumbing fixtures and electrical systems. While very popular among many homeowners, home warranties are not perfect for everyone. Here we’ll go through the main pros and cons of home warranties for better understanding of how they might fit into your individual situation.
Home Warranty Pros
Discounted Maintenance Requests - Usually home warranties provide a flat rate for service calls if you need on-the-spot maintenance. The rate is lower than you’d pay a company or specialist directly and you can sometimes further reduce the cost if the warranty provider offers upgrade options.
Savings on Expensive Repairs - Besides saving on labor costs, the repairs themselves are cheaper when you have a home warranty. Warranties typically include coverage for appliances that are most likely to fail, such as kitchen ranges, plumbing fixtures and electrical systems. These are all extremely expensive repairs normally as you need to hire certified professionals, so a home warranty can help lower that cost.
Options for Extended Coverage - Many home warranties have options for levels of coverage. You can pay additional fees to include other items like pools, air conditioning units and other costly appliances that you want extra help with. You might upgrade a warranty policy to cover pre-existing conditions, like damage or disrepair from previous owners.
Home Warranty Cons
Your Property Type May Not Be Covered - Unfortunately, some property types are excluded from many home warranties. Examples of these property types would be mixed-use commercial-residential properties or mobile homes that aren’t attached to a permanent foundation. You can’t get coverage for a property you don’t own, either, so renters are ineligible.
Replacement vs Repair - It’s not up to the homeowner whether an appliance is repaired or replaced. You might get stuck with an obsolete or dated system rather than able to upgrade to a brand new one. This is an important thing to clarify when looking at different policy options, especially if you are buying an older home.
No Choice in Providers - When you have a home warranty, you can’t choose your own technicians or service providers. The warranty company will have contracts with their preferred providers and while this is a non-issue most times, it means you have no choice but to deal with the people they hire. You might also have limited say in the timeframe of repairs which can be inconvenient depending on the situation.
Other Policy Exclusions - There are caveats in appliance coverage. Certain circumstances might mean an appliance is not covered under your policy unless it malfunctions for specific reasons. If an appliance has not been “properly maintained” either by a homeowner or previous owner, it might lose its coverage regardless of failure. Other things like extreme weather damage and hazards won’t be included in a home warranty, as they’re typically included in homeowner’s insurance instead.
Overall, a home warranty can be an excellent supplement to your home coverage options and provide quality peace of mind. The most important thing when deciding is to compare policies and details to make sure you know exactly what the warranty covers and how.
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