What to Look for in Home Buyer Protection Plans

Homebuyers often spend their entire budget on the price of a home. They don’t want additional expenses popping up in their first year of ownership. Homebuyers receive peace of mind that a home warranty will cover most home systems and appliances for repair or replacement with a small co-payment. Continue reading to learn about the basics of these plans.

Difference Between Home Insurance and Home Warranty

Most home buyer protection plans are different than home insurance. Homeowners’ insurance pays for damages and losses caused by unexpected events like fire, high winds, storms, and theft. A homeowner’s policy does not help if a washing machine breaks down or an oven stops heating.

A home warranty will cover critical systems and appliances. Each contract is different, so be sure to shop around and check the fine details of each plan before making a decision.

What a Home Warranty Covers

Usually, a home warranty covers home appliances, including a refrigerator, stove, dishwasher, trash compactor, microwave, washer, and dryer. Most contracts also cover electrical systems such as interior wires and electrical lines. Heating and cooling systems, including all components of the units, are often covered. Plumbing systems including toilets, water heaters, drains, waste lines, and shower valves are covered. Some random items, like doorbells, garage doors, and exhaust fans can sometimes be included.

How a Home Warranty Works

Anyone who owns a home and wants to protect it from everyday wear and tear can purchase a warranty. Often, homebuyers and sellers enjoy the extra security a home warranty provides when entering a real estate transaction. The plan can cover minor and major repairs during the sale and the first year after the sale.

If a covered appliance or system breaks down or malfunctions, homeowners call the home warranty provider. The home warranty provider will contact and send a qualified technician to diagnose the problem. Usually, homeowners pay only a service fee varying from $50 to $150.

A home warranty typically costs between $45 and $75 per month. However, customers may purchase additional coverage for items such as well pumps or in-ground pools.

Benefits of Home Warranties

There are many benefits to home warranties. Most companies have a dedicated customer service team available 24/7 to address concerns and system breakdowns. They often have online access to warranty upgrades, payment options, and service schedules.

Home warranties take the worry and hassle out of finding a good repair technician. It also reduces the need to make decisions about repairs. Usually, the warranty company follows guidelines for which kinds of repairs and replacements are allowed. This makes it easy for homeowners to get things working again quickly.

Disadvantages of Home Warranty Plans

There are always limitations and exclusions that apply to plans. Homeowners need to read the contract carefully and understand the terms. Homeowners who prefer to have more input into who comes to their home to replace items may not appreciate this hands-off method of fixing things.

Homeowners can get peace of mind from purchasing a home warranty plan. They should carefully examine plans to find one that is the perfect fit for them and their home.