Purchasing a home warranty can be a smart financial decision. In the long run, it saves you from costly repairs that could drain your emergency savings.
However, it’s important to choose a company with a clear contract, describing what is covered and what isn’t. Also, check out customer reviews and complaints against the company before signing up.
It’s a service contract
Home warranties are service contracts that cover essential appliances and home systems when they break down. They differ from standard homeowner’s insurance, as they cover repairs and replacement costs caused by normal wear and tear. This makes them a good accompaniment to homeowner’s insurance and a savvy money move for people who are budget-conscious.
Home warranty companies have a network of skilled service contractors that can be dispatched to fix problems in a timely manner. They usually charge a fee for each call, but the amount can vary. The contract will also list the terms, conditions, limitations and exclusions of the coverage.
A home warranty protection plan can be especially useful for new homeowners, as they provide reassurance that their home’s appliances and systems will be covered in case of a breakdown. But they’re not for everyone. It’s important to weigh the pros and cons carefully before deciding whether or not a home warranty is worth the investment.
It’s a safety net
If something breaks down in your home, a home warranty can save you money. You can call your home warranty provider and they will send a technician to evaluate the issue and fix it if it is covered by your plan. The best home warranty providers offer a clear contract, so you can be sure there are no surprises.
However, if the problem is caused by improper maintenance, a home warranty company may deny your claim. This can be frustrating, especially if you’ve already spent money on the premium and service call fee. You may be better off putting the money into an emergency fund, which will earn you some interest.
It’s a smart investment
While it may seem like a costly expenditure, a home warranty is actually a smart financial move. It covers the cost of repairs to appliances and systems that can be incredibly expensive, and it can prevent you from running out of emergency funds or
having to take out a loan.
However, it’s important to choose a plan with a clear contract and well-defined terms, clauses, and exclusions so that you don’t end up paying for something that you shouldn’t. Also, it’s a good idea to consider a home warranty if you are buying a new construction home with appliances that may be out of their original manufacturers’ warranties.
It’s also important to remember that a home warranty doesn’t cover everything, so you should still set aside money for emergencies in an emergency savings account. You can find out more about home warranty companies by reading online reviews and investigating consumer complaints. Some states have even published formal warnings against home warranty companies for using deceptive tactics to deny claims.
It’s a peace of mind
A home warranty can give you peace of mind when it comes to the upkeep of your home. It provides you with a trusted partner that will send a skilled technician to your home to make the repairs.
A service fee is charged to cover the cost of a service technician’s visit, but home warranties typically do not charge for replacement components or deductibles (similar to what you would find in an auto insurance policy). You should always shop around for home warranty plans to ensure you are getting the best value.
While a home warranty is not necessary for new homes that come with manufacturer’s warranties or credit cards that offer extended warranties, it is an excellent investment for older homes. The annual premium is far less than what it costs to repair or replace major appliances and systems, making a home warranty an affordable option for any homeowner. For more information on the best home warranty companies in California, go online and look at reputable companies who have been around for years.