Do You Need a Home Warranty?

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Should you buy a home warranty when you move? For many buyers, home warranties offer peace of mind when it comes to budgeting for home expenses. For others, home warranties are simply a waste of money. Whether or not you need to purchase a home warranty depends on your specific needs, finances and the condition of your new home.

What is a home warranty?

It’s essentially a single protection plan that homeowners can purchase to cover the cost of repairs and replacing of appliances and systems in their homes. Basically, think of it as insurance for your home appliances. However, unlike homeowner’s insurance, home warranties only cover basic appliances and features, while insurance covers big-ticket items such as the structure of your home and personal household belongings.

What does a home warranty cover?

Practically every homeowner will experience problems from time to time with appliances and home features. After all, who hasn’t had a dishwasher or refrigerator break down at least once in their lives? Fortunately, this is where home warranties can help. Having a home warranty ensures that if your appliance breaks or become damaged, a service professional will come to your home to repair or replace the item. The only thing you’ll likely end up paying for is the small service fee. Home warranties typically cover:

  • Plumbing systems    
  • HVAC units
  • Electrical systems
  • Washing machines and dryers
  • Garbage disposal
  • Ovens and stove-tops
  • Dishwashers
  • Refrigerators and freezers
  • Water heaters

 

What to do before you move 

  • Read up on what a home warranty actually covers– First, read up on what a home warranty does and does not cover. Most home warranties cover the cost of repairing or replacing a number of home appliances and systems within the home including the ones listed above. Be sure to research different providers and their offerings before committing to a home warranty plan.
  • Ask the seller about existing home warranties– Do the sellers have a home warranty already? Do they have individual manufacturer warranties for different appliances? Make sure to ask the sellers these questions when purchasing a home.
  • Have an inspector get a good look at the home’s appliances and features –  Be sure that the inspector who oversees your official home inspection gets a good look at the appliances and systems. Your inspector should be able to give you a full assessment of the condition of these items. This should make it easier to decide whether or not you need a home warranty.

Home warranties are ideal for:

  • Those moving to an older home or one with outdated appliances– With older homes, it’s just a matter of time before something breaks down (and trust us, it will!). So, save yourself the headaches, frustration and expense by buying a home warranty when moving.
  • Those who are risk averse – If you’re one of those people who simply needs the peace of mind that a home warranty provides, we strongly suggest purchasing one when you move.
  • Those who are not financially prepared to make a large, out of pocket expense – Of course, new appliances don’t come cheap. Unless you’re financially prepared to replace these items at the drop of a hat, it may be a good idea to purchase a home warranty.

Home warranties are not ideal for:

  • Those moving to a new home or one with updated appliances – Most new home features and systems should work without the need of repairs or replacements for several years. In addition, these newer appliances should still be covered under manufacturer warranties, which are usually good for up to several years.
  • Those who already have individual manufacturer warranties on appliances –If household items are already covered under an individual warranty, then there’s likely no need to purchase a larger umbrella home warranty policy, unless you’re worried about plumbing, electrical and other big ticket items breaking down.

What to do with your warranty information

If the seller passes along their manufacturer warranty or home warranty information to you, be sure to store all paperwork and receipts in an easy-to-find file folder and/or home binder. 

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