Did you know that 66% of homeowners report a failure of two major items in their homes during the first year of ownership? Well, this is a survey done by Global Home USA. The cost of repairs can be quite costly for homeowners, especially if they haven’t set aside money for that purpose. Fortunately, a home warranty can help homeowners with these repairs and replacements if necessary.
ARW is designed to help homeowners manage the cost of unexpected home repairs, hence helping them save up to hundreds or thousands of dollars on repairs and replacements.
What is a home warranty?
A home warranty is a service contract that provides for the repair and replacements of home appliances and system components that malfunction due to age or normal wear and tear. These appliances and systems include washers/dryers, oven, refrigerator, plumbing, electrical, HVAC systems, etc. A home warranty is almost the same as homeowners insurance since they offer additional protection, and you also pay annual or monthly premiums. The main difference is what they cover because a home warranty covers a home system and appliances. In contrast, homeowners insurance covers the home structure against theft, fire, floods, and other natural calamities.
How does the home warranty work?
If you have never purchased a home warranty, then you are probably wondering how it works. Well, let’s say you have a home warranty plan, so when your appliance or a system in your home breaks down, you will contact the home warranty company to file a claim.
The company will then send a contractor or technician to come and assess the damage and give a report. Suppose the contractor or technician finds that the appliance or system is not function due to age or wear and tear, your claim will be approved and that the item is covered under a home warranty contract. In that case, the home warranty will repair it or replace it if necessary.
The homeowner will only be required to pay a certain service call fee, which can be less than $100, depending on the home warranty company. The company will cover the cost of repair or replacement.
However, you should note that there are some cases when a claim may be denied. That could happen if the item that has broken down is not covered under a home warranty contract or if the company does not offer such coverage.
The pros of a home warranty
There are so many benefits that a homeowner will enjoy by purchasing a home warranty. Some of these benefits include:
- It saves you money
Constant repairs and replacements of home appliances can cost hundreds or thousands of dollars. This can be very expensive. But if you have a home warranty, the company will cover the entire repair or replacement cost. You will only pay a flat-rate service call fee, which is way lower compared to the amount you can actually use to pay a contractor for the work done.
A home warranty generally costs between $300 to $600. But homeowners’ annual cost of repairs and maintenance can add up to thousands of dollars annually, which is way more than a home warranty cost.
- Peace of mind
A home warranty assures you that all your systems and appliances will work efficiently, no matter what. At a meager $300, it can give you peace of mind, and it won’t pop up into your household budget. With a home warranty, you will say goodbye to worrying about your system or appliance repairs. You will relax knowing that somebody got your back.
- It is an easy fix
One of the best things about a home warranty is that it is a quick fix. The company is just a phone call away. You just call the company or send them an email, and they will be there within no time. There is no need of scrambling trying to look for a reputable repair company or technician to come and fix your home appliances or system because the home warranty company has already chosen the best companies in the market to come and do the repairs.
Moreover, if your system or appliance breaks down past or before business hours, you don’t have to wait until business hours to get your item fixed. Reputable home warranty companies operate 24/7. You can still contact them, and they will come regardless of the time.
- It can help you avoid debt on major home repair expenses
As mentioned above, the cost of repairs can be very high, especially when t comes to home systems, such as plumbing, electrical, or the HVAC system. These repairs may cost hundreds of dollars. If you don’t have an emergency fund, the cost of repair or replacement could be overwhelming, therefore requiring a payment plan. This can put your family in consumer debt and drain you financially. But having a home warranty can help you avoid all these. That’s because the company will cover the cost of repairing your system, whether it is the electrical, plumbing, or HVAC system.
- You can choose the coverage that suits your needs and budget
Another incredible thing about a home warranty is its flexibility that allows homeowners to choose a plan that suits their needs and budget. The homeowner can choose between the basic and comprehensive plan to ensure that their covered appliances and systems are taken care of. The basic plan covers major systems, such as electrical, heating, plumbing, and appliances such as oven, dishwasher, and fans. The comprehensive plan covers air conditioning, refrigerators, and more. Of course, having the option to choose the plan that you need allows you to save on items in your home that you are not worried about.
The cons of a home warranty
Of course, there are also drawbacks to purchasing a home warranty. Let’s delve into them.
- You may not need it
Perhaps if your home is still new [less than five years old] or properly taken care of, you may find that there are no claims to submit. A home warranty is generally ideal for people living in older homes.
- A home warranty will not fix what is already broken
Let’s say you move into a previously owned house, and the house has poorly maintained systems or broken fixtures; they won’t be covered under your home warranty. So if you were hoping that the warranty company was going to fix all your new home’s problems, then you may have to rethink your decision about purchasing a home warranty. Moreover, you will be required to do a home inspection and report to the home warranty company to show that the items were in excellent condition when you purchased the warranty.
- You cannot choose your service provider
The home warranty company chooses the technician or contractor who will come to fix your appliance or system. So that means that you don’t have the ability to choose among different providers. They will send a company that they feel is right for the job. However, the technician or contractor who will be sent to you has been carefully reviewed and vetted by the home warranty company, so you don’t have to worry about their expertise and experience.
- Bigger items may require extra cost
Certain repairs on items, such as septic tanks, HVAC systems, roofing, and refrigerator may cost a significant amount of money. That’s why they aren’t covered under the basic plan. You will have to pay extra to get these things covered. To achieve this, you will have to upgrade your warranty, which will cost you more money.