Home appliances are one of the largest costs associated with owning and maintaining a home, so it’s no surprise that many homeowners choose to purchase home warranties when buying major
Why You Should Get a Home Warranty
Dated: May 12 2022
Home appliances are one of the largest costs associated with owning and maintaining a home, so it’s no surprise that many homeowners choose to purchase home warranties when buying major appliances like dishwashers, ranges, and washing machines. But what about when you already own your appliances? Should you invest in another warranty? Read on to find out!
What are the benefits?
There are many reasons why someone would purchase a home warranty policy, including: reduction of risk, peace of mind, or as an investment. A home warranty might be a good investment if you’re looking to flip your house in five years and want to increase your return on investment. On average, policies could run between two and five percent of your selling price (that’s $1,000 to $2,500 for every $100,000 of value). Since most buyers pay closing costs upfront when purchasing a house (on average around 2% of its selling price), covering those costs with enough home warranties could more than make up for their high cost. But remember that every policy is different and it can be hard to find coverage on some types of appliances or systems.
What does a warranty cover?
Warranties usually cover appliances, major systems (such as heating and cooling), or structural elements of your home. Depending on your policy, it may also cover smaller items such as faucets, toilets, ceiling fans, garage door openers, etc. Some policies may only offer coverage for a specified amount of time (i.e., five years) while others will offer coverage for an entire lifetime – just make sure you know what you’re signing up for before purchase! It’s always smart to check with state regulations first as well; some states require home warranties to be licensed and insured by specific agencies. Not all states have these requirements but better safe than sorry!
Is it worth it?
There are many benefits to having a home warranty. For one, they offer repair services on any part of your home that could potentially break down, including heating and cooling systems, appliances, and electrical work. This can prevent you from having to pay unexpected emergency repair bills out of pocket when something goes wrong. On top of that, warranties have no monthly payments or yearly fees for as long as you own your home! Some even cover repairs made by unlicensed contractors—meaning that if you’re not sure how to fix something yourself (or don’t feel comfortable making those kinds of repairs), warranties can give you peace of mind knowing it’s been taken care of by professionals for far less than it would cost to do it yourself.
How do I find one?
A good place to start is by asking your real estate agent or bank. Ask friends, neighbors and colleagues as well – they may have experience with home warranties and can steer you toward reputable companies. Research online reviews of potential companies and check local BBB ratings before making a decision. Consider your home's age, construction materials and size; if you have an older home with more complex systems, a more comprehensive warranty might be best for you. For example, it may cover issues specific to older homes such as roof leaks or cracks in masonry that are not included in some basic plans. Also consider how far away your provider is from where you live; being close by could help when something does go wrong with one of your systems so repairs can be scheduled quickly without downtime on your end.
Tips for your new policy
Call your local Better Business Bureau to ask about customer feedback for any specific plans you’re considering. This way, you’ll get insight into how reliable and trustworthy each company is, which can help ease your mind when it comes time to submit claims. If a company gets lots of complaints about customer service or even outright fraud—not honoring policy agreements, for example—look elsewhere. Also make sure that whatever plan you go with is backed by licensed contractors who are qualified to work on major systems in your home like HVAC and plumbing. Although some plans do have work completed by subcontractors (which are usually named in contracts), don’t feel as though they should be performing all of your claim repairs.
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