What is a home warranty policy and what can one do for you? It’s better to answer that by saying what a home warranty isn’t. It’s not the same thing as a homeowner’s insurance policy, which protects the entire house.
Home warranties cover repairs and replacements on the house’s systems and individual appliances. The warranty applies under normal wear and tear situations, not just destructive events. Below are some more specifics about what a home warranty is and how you can benefit from it.
Invaluable to Older Houses
Everything breaks down eventually. It’s only a matter of time before something requires maintenance or replacing altogether. This fact alone makes it worth investing in a home warranty. The warranty increases in value the longer you remain in your home, or if you’re inhabiting an older house. Not everything gets replaced when it’s running out of juice, so the longer a house has been around, the more likely it is for something to break.
What Does a Home Warranty Cover?
Nearly every appliance or functional system that a house relies on is covered under a home warranty plan. Plumbing systems and appliances connected to the home, like garbage disposals, are included. HVAC units are eligible for repair or replacement, which is especially useful if your AC fails during the summer. Electrical systems and appliances fall under a home warranty as well. Washers, dryers, ovens, and dishwashers are just a few of the many appliances that are eligible for protection.
Benefits to House Buyers
There are a few key benefits provided by home warranties for those looking to buy a house. First and foremost, it takes a lot of pressure off of the buyers back. There are many unknowns involved with the purchase of a house, more so with an older one. Having that extra amount of security brings peace of mind of a buyer.
Convenience is another thing provided by home warranties. You’ll obtain a toll-free number to call anytime you have a problem. The contractor who is in charge of covering your house appliances is qualified and trained so that you can trust their handiwork.
The seller of the home will usually pay for the first year of the warranty as an incentive. Each year after that, the buyer can renew the contract. This eliminates the need to shop around for other insurance options, even if the new homeowner upgrades or changes out an appliance.
Benefits for Sellers
The seller typically pays out of pocket for the first year of home warranty. It may seem like a downside at first, but it’s an investment into security just as much as it is for the buyer. One of the obvious perks is you’ll stand out from the competition who doesn’t offer home warranty. It may be icing on the cake for some buyers, but to some, it will truly help to seal the deal.
As a seller, you’ll also be covered for potential repairs and replacements while the house is on the market. It’s one less headache for you to worry about if you need to fix something on the fly. The home warranty also removes potential complications after closing and transferring the title. Keeping the insurance rolling will ensure a smooth transition on to, and out of, the market.
Home warranties give house owners a sense of security and certainty. It’s a simple system that’s easy to use and maintain, which makes it a very worthwhile investment for the long run.