In 2022, homeowners spent as much as $6,000 on average on home repairs and maintenance. If you want to minimize headaches when caring for your home, you might want to get a home warranty.
Although home insurance can be valuable for covering damage as a homeowner, it has a lot of limitations and is only meant for unexpected disasters and damage. A home warranty can be a great solution if you need additional coverage for your home
So, do you need a home warranty? In this guide, we’ll help you decide whether you need a home warranty or not.
What Is a Home Warranty?
A home warranty is a plan that provides coverage for repairs and replacements in your home. Under the plan, you’ll pay a monthly premium and will be able to get repairs and replacements as needed.
A home warranty plan may include coverage for repairs to appliances as well as to parts and components that are part of your home’s systems. A home warranty will cover major appliances as well as plumbing, electricity, and your HVAC systems.
Home Warranty Vs Home Insurance
Although many people confuse the two, a home warranty is not the same as homeowners insurance.
Homeowners insurance is only meant to provide coverage for unexpected losses due to disasters such as fire or weather damage. A home warranty plan, on the other hand, provides coverage for appliances and systems that are in need of repair or replacements due to normal wear and tear.
Having both is ideal since they each cover different things.
How Much Does a Home Warranty Cost?
The cost of a home warranty will vary based on the specifics of the property you own. However, a home warranty will generally cost around $300-$600 per year. This may need to be paid all at once or in installments, depending on the provider.
In addition to this, you’ll pay a flat fee to a contractor when you need a repair. This will typically be between $75-$150.
Some companies will require you to pay a deductible on the repairs that you get and there may be other fees as well. This will depend on the specifics of the home warranty you have.
Be sure that you read the fine print and understand a home warranty policy fully before you choose one. If you’re looking for a home warranty, be sure to check out Jacob Realty’s home warranty resource.
Who Pays for a Home Warranty?
If you’re purchasing a home, you may be wondering whether you’ll need to pay for a home warranty or not. Whether a home warranty is included or not will change based on whether you’re purchasing a home in a buyer’s or seller’s market.
Generally, it’s more common to see a home warranty included if you’re buying in a buyer’s market. A seller may want to sweeten the deal and provide an incentive to purchase the home. Offering a home warranty can help.
In a seller’s market, it’s less common to see a seller pay for a home warranty when selling a home. In this case, the buyer will pay for a home warranty if they decide they want one.
What Do Home Warranties Cover?
The things that a home warranty will cover fall into one of two categories. This includes home appliances and systems.
A home warranty will cover major appliances including a refrigerator, stove, dishwasher, washing machine, or dryer. However, a home warranty plan doesn’t usually cover smaller appliances.
Another thing that a home warranty will cover is home systems. Systems include HVAC units, plumbing systems, electrical systems, and any system that’s essential for living in your home.
When you have a home warranty, repairs, and replacements become straightforward. You’ll be able to get the service you need from a contractor for a flat fee.
Keep in mind that the amount of service and maintenance that’s included will vary based on the specific home warranty plan you have.
Are Home Warranties Worth It?
A home warranty isn’t the right choice for every homeowner. You’ll want to think about your needs carefully when deciding whether you should get a home warranty or not.
Here are a few reasons it may be worth getting a home warranty:
- You want to have peace of mind when it comes to home repairs and replacements
- You want fees and costs to be clear and consistent
- You don’t want to spend a lot of time searching for reliable contractors when things go wrong
Some reasons you may not want to get a home warranty include the following:
- You want to have more control and choice over the items you install and the contractors you hire
- You anticipate that very few repairs will be needed
- You want to avoid dealing with the fine print and potential disagreements with your home warranty company
Although a home warranty plan can keep your costs consistent when it comes time to make repairs, there are some drawbacks.
You’ll have to work with your home warranty company closely and they may end up denying claims that are completely valid. You’ll also have less control over the contractors you use and the specifics of replacements and repairs in your home.
Do You Need a Home Warranty?
So, do you need a home warranty? Depending on the needs of your home, it can be well worth getting a home warranty. A home warranty can simplify repairs and can reduce your costs, so consider getting one when purchasing a home. Need more home and real estate tips and advice? Find more interesting guides by browsing our blog now.