Home Warranties: Do I Want One? What Does It Cover?


People that are considering buying a home might be curious about purchasing a home warranty plan. Some real estate agents may strongly recommend home warranties for those who close on an older home. Since these properties might have been built years ago under relaxed builder standards, there could be problems with existing fixtures in the homes that may be protected by a home warranty.

What a Home Warranty Covers

Home warranty coverage varies, depending on the company and the type of plan. Some home warranty companies offer multiple types of policies that provide insurance against malfunction or damage for certain appliances. In essence, a home warranty is a service plan that covers the cost of repairs to basic home systems. Many plans cover heating and cooling systems, electrical systems, telephone wiring, and appliances that were installed at the time the home was built.

Costs of Home Warranty Plans

If a homeowner selects a basic home warranty plan, the cost may be only a couple hundred dollars a year. However, the more extensive the coverage, the more expensive the plan. Detailed plans that cover pre-existing malfunctions in a home's design can run upwards of $600 a year annually. It's also important to note that buying a home warranty does not mean that homeowners will not need to pay other repair fees. Most plans also require the plan holder to pay a service fee for each visit. If there are recurring problems in the same system, the cost of each service fee can add up quickly.

Should You Buy a Home Warranty?


Each homeowner must decide for himself if his situation merits purchasing a home warranty plan. Thus he must be educated on the pros and cons of each particular warranty plan. Real estate companies may include home warranty coverage in the price of a sale to encourage homeowners to buy a home with pre-existing conditions. For these real estate shoppers, a home warranty can sweeten a new mortgage deal. Those who have been in their homes for a while might consider buying a home warranty if their appliances are reaching the end of their useful life. For example, if the home is more than 10 years old and the appliances were installed when it was built, a homeowner may potentially save money on repairs that will be needed by purchasing a home warranty plan.

Choosing a Home Warranty

Before purchasing a home warranty, property owners should read the terms of the available policies carefully to find out what each plan covers in the home. Many plans do not allow the homeowner to choose their own repair service, so those who are contemplating coverage may want to inquire which repair companies are contractors for the warranty company. Disreputable repair services may recommend unnecessary work that is not covered by the plan. Reading customer reviews of these companies may help anyone decide if the warranty will be more trouble than it's worth.

Whether or not your property needs repairs or is fine condition, a home warranty is something to consider. If you have any questions please feel free to let us know.

Kevin Hughes

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