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Is Investing In A Home Warranty A Good Idea?

Saturday, February 13, 2021

Have you clinched a great deal on your home purchase? Big news and certainly, a happy one. However, it is time to be extra careful about your expenditures now. Most of your funds are tied in the property. The idea of footing repair bills, big or small is a huge bummer. What saves you from these unwanted expenditures is a good home warranty.

Investing in a home protection plan or a warranty is not cheap. It is still a lifesaver. Think about it - with most of your cash reserves exhausted and an active home purchase loan in hand, you are definitely on a slippery slope. In such circumstances, even the tiniest of mending work seems like a hefty expense.

So, what is going to stop you from busting your budget? A home warranty! Is it a worthy investment or not? Let’s learn a little more about a home warranty, how it functions, and what it really does before you come to a conclusion.

What should you know about a home warranty?

A home warranty is a year-long home service contract. Some even call it a home protection plan. Signing up for the protection contract rewards you with benefits. For instance, a home warranty covers the expenses of repair or replacement of appliances and crucial mechanical systems in your home.

It is no secret that machines break down, wires wear off, and appliances fail to function. Damages are common but unprecedented. It is not possible to assume when your plumbing system will come crashing down, right? However, when the damage is done, it is imperative to restore the mechanical system in working order right away. Paying for such labor-intensive repair works is huge. It undoubtedly burns a big hole in your wallet.

Home warranties and protection plans save you from busting your funds. It primarily covers all critical home systems like: 

HVAC

  • Electrical
  • Plumbing
  • Everyday appliances like microwaves, dryers, washers, and others
  • Garbage disposal systems 

The coverage varies with companies. You must always look into the specs and what a home warranty covers with a fine-tooth comb. Do you have a hot tub on your property? A swimming pool maybe? Purchasing add-on or top-ups on your existing warranty can save you big figures. You practically extend your plan’s coverage on appliances and systems that are not protected under your basic home warranty. 

Does a home protection plan offer coverage on all types of appliances and systems?

The answer is both a ‘Yes’ and ‘No.’ Let’s clear the air. 

Home warranties or protection plans rewards one with coverage on any or everything that falls under the category of mechanical home systems and appliances. In circumstances like an appliance being damaged prior to purchasing a warranty or a home system is broken, the protection plan does not work. It offers zero coverage on pre-existing damages.

A home warranty does not pay for the damages or loss caused due to a massive fire breakout or robbery. This is where home insurance comes into play.

Whether you are looking to secure your in-wall AC units or the smallest of things like faucets or smoke detectors, a home protection plan can cover it all. However, structural aspects of a home like a roof or windows cannot be safeguarded using a home warranty.

What are the positives of opting for a home warranty?

The perks of plowing your money in a home warranty are many.

  1. Old or new, you can get your appliances fixed or replaced without paying a dime extra
  2. Just when you thought that mending a home system is a mammoth expense, home protection plans steps in as a savior. From appointing professionals to getting the job done, the company issuing the warranty does it all
  3. The value of your property sees a hike.

For a home warranty with optimum coverage, you might have to shell out a grand. It does sound like a big investment. But, bills of repair or replacement might cost you thousands of dollars. Paying $1000 against several thousand is a smart pick.

Conclusion: 
 
Investing in a home warranty is worth every cent.