Most people looking for the best deals and protection levels in a home warranty usually opt for a solution that covers the purchase of a new home. That’s because a home warranty plan is meant to cover costs that the new homeowners might incur but can’t afford to pay for themselves. And that’s a common situation with first-time homebuyers of new homes.
What is a Home Warranty Plan?
Home insurance has a limit to the things it can cover. The purpose of a warranty plan is to cover features that are not available in home insurance. When you buy land and seek the services of a professional construction company, the company should offer a warranty for the services provided.
This warranty is meant to protect homeowners from structural problems and also issues that might come later during and after the construction. You might not enjoy the same privileges if you’re buying from a real estate company although there are some that do offer warranties on the homes they’re selling.
How Does a Home Warranty Work?
Before you can ask yourself how much does a home warranty cost, it is important to first understand how it works. Once you buy a home warranty, you find out that it can cover issues that are not addressed in the home inspection process. Not only does it cover the cost of appliances, but it can also take care of roofing and structural problems.
It covers the furnace, HVAC system and other things that are included with the home. The homeowner enters into an agreement to pay a standard rate for the protection and the company agrees to pay for repairs. It should be noted that the warranty doesn’t cover all the costs related to replacing and repairing issues in the house.
For example, let’s say there’s a problem with the HVAC system. The home warranty company will send a technician out to do the repair and cover related costs, but the homeowner will have to pay a service fee. The home warranty provider will also require that you work with a list of approved companies and contractors.
Home Insurance vs. Home Warranty
A lot of people tend to think that having home insurance is enough to cover everything in the home. They never explore what home insurance can or cannot cover. The majority of insurance companies will only cover issues related to damages to the home and nothing more.
Those living in places that experience harsh winters usually have a problem with the pipes freezing. The insurance company will send a repair person to handle the situation but there could be other factors to consider. The broken pipe could also result in broken walls which could lead to mold developing. With a home warranty, all the auxiliary repairs are also covered and the repairs are more comprehensive.
What a Home Warranty Doesn’t Cover
Even though a home warranty covers a lot of things, there are some items that it doesn’t. A home warranty will not cover automatic garage systems, garage door openers, or air conditioners. The best option would be for you to purchase extended coverage so that the mentioned items are also covered. You could also add additional coverage for swimming pools, home spas, and vacuum systems.
Benefits of a Home Warranty Plan
Most first-time homeowners think they can get away with only home insurance. But insurance may not be enough to protect everything in the home. You could buy a home and only come to later discover that there were hidden damages that passed inspection and are not covered in your home insurance policy.
The process is a lot easier if you’re buying a new home because the warranty is provided by the contractor. There are not many real estate agents that provide a warranty for older homes. There are also homes that are just a year old that could also lack a warranty.
How Much Does a Home Warranty Cost?
Unfortunately, there is no blanket answer to this question. Those who are in the market for a new home need to factor in the cost of deductibles and premiums. Most companies have home warranties that take effect 30 days after the owner signs all the paperwork on the home. There is a deductible charged anytime the warranty company services are used. For more information about purchasing a home warranty, check out these helpful home warranty reviews and suggestions.