Do I Need A Home Warranty?

Do you need a home warranty? Here is some helpful information to help you decide.

My husband and I have purchased 3 homes, and each time we requested the seller to pay for a 1 year home warranty for us. On our first home we were lucky in that we never had to utilize it, but on our second home our heat went out. We were living in North Dakota and it was winter. BRRRR! We called our home warranty company, discovered HVAC was covered, and they scheduled a company to come out same day. We payed a $75 call fee and that covered the serviceman's time and any parts needed to replace broken parts. It could have cost a lot more! Our dishwasher broke as well and again we payed the call fee and had a brand new dishwasher installed in a few days.

A home warranty is a service contract that covers the repair or replacement of major home systems and appliances due to normal wear and tear. Home warranties typically cover items such as HVAC systems, plumbing, electrical systems, water heaters, and kitchen appliances like refrigerators and ovens.

A home warranty is good for homeowners who want to protect themselves from unexpected and potentially expensive repairs to their home systems and appliances. With a home warranty, homeowners can have peace of mind knowing that if something goes wrong, they won't have to pay for the full cost of the repair or replacement.

Home warranties can be particularly useful for older homes or homes with older systems and appliances that may be more prone to breakdowns. They can also be a good option for first-time homebuyers who may not be familiar with home maintenance and repairs and want some extra protection during their first year of homeownership.

It's important to note that home warranties do have limitations and exclusions, so homeowners should carefully review the terms and conditions of the warranty before purchasing to ensure they fully understand what is covered and what is not. Homeowners should also consider the cost of the warranty, the deductible or service call fee, and the reputation and reliability of the home warranty company before making a decision.

When buying a home, it is sometimes reasonable to request the seller to purchase a 1 year home warranty for the buyer. Consult with your real estate agent to see if you should ask for this as a part of your offer.

What is the difference between a home warranty and home owner's insurance?

Home warranty and home insurance are two different types of protection for your home, and they cover different types of risks.

Home insurance is designed to protect you financially from unexpected events like fire, theft, vandalism, and natural disasters. It typically covers the structure of your home, personal belongings, and liability for injuries or damage to others. Home insurance is usually required by mortgage lenders and provides coverage for events that are sudden, accidental, and unforeseeable.

Home warranty, on the other hand, is a service contract that covers the repair or replacement of major home systems and appliances due to normal wear and tear. This includes items like HVAC systems, plumbing, electrical systems, water heaters, and kitchen appliances. Home warranties are not required by mortgage lenders, and they cover items that are not typically covered by home insurance.

While home insurance protects against sudden and unforeseeable events, a home warranty provides peace of mind for homeowners against the cost of unexpected repairs to home systems and appliances that wear out over time. Home insurance and home warranty are complementary products, and homeowners may want to consider both types of coverage to fully protect their investment in their home.