What should you search for in a home warranty or home repair plan?

Bought a new home for your family? Well, you’re probably going to be offered a home warranty. The seller may offer to purchase one on your behalf just to provide you a peace of mind that anything inside the home fails, it can be fixed affordably. If not, you will most probably be going to receive numerous mail reminders and leaflets to purchase a home warranty once the sale closes.

A home repair plan sounds like a great form of money protection against unforeseen home repairs. I would rather take my family for dinner somewhere than to pay excessive amounts of money for a simple repair.

What is a Home Warranty?

I remember having confusion about Home Warranty plans and often mixed it with homeowner’s insurance, which covers major damages such as hail, property crimes or fires. A home warranty is a contract between a homeowner and a company that has discounted fixing and replacement service on a home’s major components, for example, a septic system warranty, electrical systems, plumbing, etc.

A septic system warranty really came useful when I had a major problem in my drains. Luckily it was fixed in a flash (flush).

Some home warranties also cover major appliances, refrigerators, washers and often swimming pools.

The Benefits of a Home Warranty

Like every warranty, a home warranty is supposed to give you and your family peace of mind against expensive and unforeseen repair bills. For ahead of the house who doesn’t have an emergency fund or wants to protect one, a warranty may act as a buffer in-between. Home warranties also make sense for folks who aren’t handy or don’t want to have their head wrapped around tracking down a contractor when they get in a problem.

Warranties can also be useful to families with expensive home appliances. A warranty can be helpful for people who have just spent their savings to purchase a home and want to avoid any additional major expenses that may occur.

Should I buy a Home Warranty?

The shortest answer is, yes. At the end of the day, it’s up to your personal property with specific assets whether a home warranty is actually worth it. Most of the homeowners understand the attached value and peace of mind that comes with never having to worry about surprises in prices of small scale repairs.

Those with a home warranty won’t have to have their head wrapped around when their heating system breaks or when the dishwasher makes a banging noise, when - well, you get the bigger picture.

Well, how about the pricing?

Having a family means looking out for every dollar. For me, I didn’t want to pay an excessive amount of money. A home warranty may cost a few hundred dollars a year, paid upfront or installments. The cost of the plans varies depending on your home, condo, duplex, townhouse and of course, if you wish a basic or extended plan.

The cost usually does not vary as your property ages, unless the home is brand new, which raises the price of coverage. In most cases, the home’s square footage also does not affect the price in most cases, unless the property is big in size.

Having a home warranty or a home repair plan doesn’t mean the homeowner will never need to have his penny spent on home repairs. Some problems won’t be covered by the home warranty, whether because the homeowner didn’t acquire coverage for that specific item.

In conclusion

The bottom line is - do your own research. There are many options out there but always look for companies that will actually pay for legitimate repairs when called upon. Before purchasing one, read the fine print in the warranty contract and carefully wage whether the warranty is likely to pay off in the long term.