Why You Should Consider a Home Warranty

Home buyers purchase house insurance plans to cover the costs of repairing structural damage in the event of disasters like floods, fires or tornados. But home insurance doesn’t cover smaller costs, such as the breakdown of appliances including central air systems and kitchen appliances. But it is possible to hedge against these small incidents with the purchase of a home warranty when closing on a house. What do you need to know about it?

If you’re buying new housing stock, all of the appliances are new and likely covered by the manufacturer’s warranty. A home warranty covers the costs of repairing or replacing older appliances included in the sale of an older home. Policies generally cover plumbing, electrical systems, washers and dryers, and most kitchen appliances.

The best time to buy a home warranty, according to real estate professionals, is at the time of home purchase, because warranty providers offer their best rates then. Comprehensive plans cost around $600 to $700, though basic coverage is usually available for as little as $300. The biggest advantage for home buyers is that they can close on a home without worrying that they’ll incur added expenses during the first year of ownership. At the end of the year, buyers generally have the option to extend coverage.

And if you’re a home seller, buying a warranty means you don’t have to worry about replacing or repairing appliances during your home’s listing period. That’s important peace of mind during what can often be an extended, stressful process. For home buyers and sellers, appliances need to be in good working order before a warranty provider will enter into a contract. Many companies offer energy–efficiency plans customized for owners of Energy Star–rated appliances and other energy–saving home features.

When something breaks, contact the warranty provider. Some charge a small fee for a verification visit, following which they will cover the required repair or replacement. If you have any questions about warranty coverage for your home, consult a warranty provider or real estate professional.

Remax Ballon

Courtesy of:
Melissa Doss
Loan Officer, NMLS #1409826

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