When Should You Buy Home Warranty?

What Is a Home Warranty?

A home warranty works similarly to other warranty agreements but with some important differences. It is a service contract for which you pay a monthly premium. Depending on the terms of your contract, you may also pay a fee for calling in a specialist when repair is needed. These fees are designed to be very affordable, allowing you to save in case a specialist needs to be called.

What exactly does a home warranty cover? This depends on the company you purchase from and your specific policy terms. However, most warranties cover all major systems and appliances in the home. This includes heating, ventilation, and air conditioning, plumbing and electrical systems, all kitchen appliances and washing machines, water heaters, food disposers, ceiling fans, and garage door openers.

One important exception is that the warranty does not cover repairs for pre-existing damage or anything that was poorly maintained or neglected. For example, if you improperly installed a refrigerator or left it on for 24 hours straight, it likely won't be covered by warranty repair. Cosmetic damage is also typically not covered.

Home warranty prices depend on the nature of the contract, the company offering it, and the size and scale of your home's systems.

Factors That Make Home Warranty Valuable

So, what makes a home warranty valuable?

• You have many systems eligible for warranty service. If you own a large home with numerous appliances, a home warranty begins to seem more valuable. Since something can break at any time, having such protection is pleasant.
• You cannot afford to pay for repairs yourself. If you can save and cover your own repairs, a home warranty probably isn't worth it. However, if you struggle to accumulate funds for emergencies or simply want more stable and predictable expenses, a home warranty can be helpful.
• You don't need immediate response. It's important to understand that while some home warranty companies are ready to send specialists during emergencies, it may take several days or weeks for less urgent work. If you're not concerned about quick response, a home warranty may be useful to you.
• You feel comfortable with a third party coordinating repairs. You won't be controlling who goes to your repair or how it's done. If you don't mind a third party handling this, home warranties become more appealing.
• You've done a comparative analysis. There are many home warranty companies with different standards and various policy types. It's important to compare before choosing one.
• You've reviewed the policy details. It's also important to know exactly what is included and excluded in your home warranty. That means carefully reading the policy terms before making a decision.
• You've checked the warranty company. While there are many legitimate and useful companies offering home warranties, there are also malicious and dishonest organizations. You should verify the warranty company before deciding whether to purchase a warranty.

Other Factors to Consider

You should also consider the following:

• Time commitment. Choosing the right policy, submitting repair requests, coordinating repairs, and other tasks can take a lot of time. This may make the home warranty slightly inconvenient.
• Limitations and exclusions. Limitations may reduce the coverage of your warranty. If damage is considered cosmetic or due to improper installation, you might end up paying for the repair yourself.
• Delays and complications. Delays in sending specialists can cause problems and headaches, especially if you urgently need a specific appliance or system.
• Documentation and records. A home warranty also requires you to maintain proper documentation proving adequate care of your home systems and appliances, as well as tracking service records.
• Service issues. Many specialists sent for warranty repairs are competent and helpful, but this isn't guaranteed. You might prefer to choose your own specialists for repairs.

So, should you buy a home warranty? The answer is yes—but only for some people in certain situations. You need to conduct thorough research and carefully consider your options before deciding whether to purchase a home warranty.