For $600 or so a year, plus a service fee of around $75 every time you ask for a repair, a home warranty can be an inexpensive way to have peace of mind as a new homeowner.
Home warranties cover breakdowns in a home, from HVAC systems to appliances. A broken water heater can be repaired within hours, but if it can’t be fixed, a home warranty can pay for a new one to be installed.
For homeowners with an older house, they may want more things covered than a newer home would need—such as older appliances—and will likely pay more for it. If you just bought new appliances and have a manufacturer’s warranty for a year or more, you won’t need this coverage. You may be able to exclude new appliances from a home warranty to cut down on costs.
Things that can be covered by a home warranty include ductwork, electrical, plumbing, dishwashers, refrigerators, ovens, stoves, clothes washers and dryers, and water heaters.
Things that are unlikely to be covered include expensive items such as septic tanks, wells, heating systems, pools, garage doors, windows and doors, sprinkler systems, pre-existing conditions, and walls. Coverage for such items may cost more. Roofs may also be exempt, though some home warranty companies sell plans to fix leaking roofs.
Consider the Cost
A big factor in deciding if a home warranty is worth buying is cost. Basic coverage can start at about $300 and go up to $600 or more.
Some home warranties charge for a service call, such as $75 or so, while others allow unlimited service calls. Contractors are screened and sent out by the company.
To determine if a home warranty cost is worth it, start by learning how old your appliances and home systems are and if the original equipment manufacturer warranties still cover them. Find out what the expected lifespan of each item is to help you figure out if a home warranty is needed.
Some home warranty companies require annual maintenance on appliances and home systems to keep the warranties valid. Some may ask how long you’ve had them. Don’t expect the home warranty company to pay for the annual maintenance of your appliances or home systems.
Read the contract carefully to make sure that old appliances are covered in the home warranty. Some don’t cover old appliances, such as anything more than 10 years old.
Any home, whether old, new or somewhere in between, will have things break sooner or later. Appliances and home systems only last so long. For $50 a month or so, a home warranty can provide peace of mind when things eventually fail.
