What Is a Home Warranty, and Do I Need One?
What if you could buy peace of mind for your biggest investment?
If you own a house, then you likely already protect it with reliable homeowners insurance. However, this may not offer as much protection as you need, especially against unexpected threats. In those situations, a special warranty might help, but most owners do not even have answers to basic questions like “What is a home warranty?”
Even if you already know what they are, you may ask yourself other questions, like “Are home warranties worth it?” and “What do home warranties cover?” Ready to get all the answers to these questions and more? Keep reading to discover what these warranties are and whether or not you need one.
Understanding What Home Warranties Are
What is a house warranty? In short, this is an agreement that homeowners make with warranty companies in order to receive discounts on any needed repairs or replacements in the house. In most cases, these agreements protect against perils not offered by traditional homeowners insurance.
For example, warranties may protect against damage to your HVAC, furnace, plumbing, or other housing components that your existing insurance may not cover (make sure you take the time to review what your home insurance covers). In most cases, warranties offer a baseline level of coverage, and owners can purchase additional coverage for other vulnerable parts of your residence.
Breaking Down the Benefits of Home Warranties
What does a home warranty do? You now know a bit more about the basics of these agreements and how they can potentially protect homeowners. However, such warranties are not the best choice for every owner, and you must carefully consider whether they would work for you and your particular needs.
For example, you need to consider which items in your house are not covered by an existing insurance plan (ideally, you already know about the top home insurance claims and how to avoid them). You should also research how much it would cost to repair or replace those items in the event of an emergency. Finally, you should consider how much this is stressing you out and whether buying a warranty is worth it simply to obtain some peace of mind.
How can you go about this, though? Below, you will find more answers to “What do home warranties cover?” to help you finalize your decision.
How a Home Warranty Can Save on Repairs and Replacements
“What does a home warranty do?” is easy enough to answer, but whether you need the protection offered by one of these warranties depends on what kind of homeowner you are. For example, if you are either good at fixing things yourself or finding the best contractors in town, you probably do not need one of these warranties because you will be just fine in the event of a disaster.
Otherwise, you may want a warranty in place that helps take these burdens off your plate. Additionally, if you have really expensive appliances, you may want a warranty because even a little bit of damage can result in major out-of-pocket expenses.
The Peace of Mind Factor: Minimizing Maintenance Anxieties
Are home warranties worth it for everyone? No, because different kinds of homeowners need different levels of protection. But if you are asking, “Do I need a home warranty?”, that is easier to answer. In most cases, it comes down to how much you value peace of mind and are willing to pay for it.
As with insurance, warranties come with an added cost, one that you will have to worry about paying each month (more on this soon). You may never need to utilize the protections of such a warranty, but its biggest benefit is peace of mind — that is, you know that you have a safety net in an emergency. For the right owner, that peace is worth more (perhaps much more) than the cost of a monthly premium.
Exploring the Limitations and Drawbacks
What is a home warranty? Beyond the basic definition, you could argue such warranties are a gamble. As a homeowner, you are gambling that you will get a decent return on investment. However, whether even making the initial gamble is worth it may vary from owner to owner.
That is because these warranties come with premiums and service fees you must pay and deductibles you must consider. Below, you will find more about how this works, which can help you answer the question of “Do I need a home warranty?” for yourself.
Weighing the Costs: Premiums, Deductibles, and Service Fees
As with your homeowners insurance, warranties come with a premium you must pay each month. They also have a service fee you must pay whenever the warranty company sends someone to your property to inspect the damage. And such agreements have deductibles, which, as always, means you will need to pay a certain amount before your warranty covers any damage to the things inside your house.
The Great Debate: Are Home Warranties Worth It?
So, is a house warranty worth it? As usual, the honest answer to that question is “it depends.” If you want peace of mind or are uncomfortable fixing things like broken appliances, warranties are a great choice. Similarly, if you do not want to spend time running down contractors when something goes wrong, the warranties offer a streamlined way to repair things and get your house back in order.
However, if you are good at making repairs and/or finding local handypersons, such protections may not be needed. And unless you have very expensive appliances, you may not want the added expenditure of another monthly premium. Depending on the threats your house faces, you may be better off with hazard insurance for your home. Throw in the deductible and the service fees, and it is clear that while home warranties are great, they are not the best choice for all homeowners.
Looking to Further Protect Your Home? Get Home Insurance from InsureOne
What is a home warranty? Now you have an answer to that question and know more about how these special warranties work. You also know what the costs involved are and how to determine whether these agreements are right for you. However, one last question: Do you know who is ready to help you save while keeping your house safe?
Here at InsureOne, we specialize in the homeowners insurance you need and the price and service you deserve. Ready to stop paying too much and start working with specialists you can trust? If so, it is time to get a quote online. You can also pick up the phone and give us a quick call at 800-836-2240. Finally, you are always free to find an InsureOne office near you.