Why Buy a Home Warranty?

What is a Home Warranty?

A home warranty is a renewable service contract that protects you for one year from the date of closing for repair or replacement coverage for the major operating systems and appliances in a home that fail due to normal wear and tear.
 

Why Buy a Home Warranty?

A home warranty helps protect your investment while you enjoy your home. While a home warranty cannot prevent systems and appliances from failing, it can save you money on costly covered repairs.

A home warranty offers the following benefits:

• Protection from potentially huge, costly system or appliance repair and replacement bills. Just one event could literally wipe out your hard-earned savings.

• A typical homeowner requires service about 2 times per year—you will simply pay a nominal trade service call fee for each covered repair or replacement.  And that is reassuring for you, your family and your budget.

• You do not have to search the Yellow Pages for a qualified technician or contractor. You will enjoy quality service from a network of carefully selected professionals.

• System and appliance failures are never convenient. You can call any time to request service. Warranty companies are available 24 hours/day, 7 days/week, ready to take your call. Or, you can simply place your service request online.

• Repair or replacement coverage. Warranty companies will replace covered items that fail when they determine they cannot be repaired, regardless of age, make or model!**

Since a home is likely one of your biggest investments be sure to protect it with a home warranty.

Click the logos on the right to review and compare these companies to make your choice. Let Teresa know what you decide so she can ready the paperwork for closing.

 

Shopping Tips for Buying a Home Warranty

Home warranties can be attractive to home owners or buyers who are looking at purchasing a property. These service contracts can cover all of a home’s major systems, such as the furnace or air conditioner, and will cover needed repairs if the appliance breaks or damaged.

Some sellers are offering a home warranty to try to lure buyers.

But not all home warranties are the same. Experts say you should carefully weigh costs, policy allowances, and customer feedback before making a decision so that you ensure you’re getting the best deal. Home warranties cost about $250 to $500 a year.

Here are some more tips from experts in shopping for a home warranty:

▪ Find customer reviews. Web sites, such as homewarrantyreviews.com, provide reviews of home warranty companies. You also might check how each company is rated with your local Better Business Bureau.
▪ Check for extra fees. Will you have to pay a fee for service calls?
▪ Check the coverage allowance. Are there any exclusions to coverage? Will the allowance cover the entire cost of a broken appliance or just some of it? For example, if you have older appliances and mechanicals, will the policy cover the full cost of replacing it or just the depreciated value? If the policy only covers the depreciated value when a 20-year-old furnace dies, for example, the reimbursement may not be enough to buy a new one. Also, verify what appliances are all included in the coverage. Some companies will allow you to add coverage for swimming pools, while others won’t.

"The biggest thing is awareness of what the exclusions are," Greg McBride, a senior financial analyst at Bankrate.com, told the Chicago Tribune. "The mere presence of a warranty, by nature, tends to have exclusions. Being aware of that can aid in the decision-making process."

Source: “When Home Warranties Are Worth It,” Chicago Tribune (Feb. 8, 2011)