What Is a Home Warranty, and Do You Need One?
Owning a home is a great achievement but at the same time, it comes with responsibilities. Repairs & regular maintenance are some of the things that you will now have to deal with as a home owner. However, many first time home owners are not always prepared for some of the issues they may run into with their utilities or even housing structure. For example you could wake up one morning to find out that your water heater has broken down and it’s 32 degrees outside. Everything in your house has a life cycle so its good to be prepared when things need fixing or even replacing.
What do you do when such things happen?
Many homeowners may not have the experience necessary to do small repairs, especially when they come at unexpected times. Some individuals may be lucky enough to have a nearby family member who is knowledgeable in these sort of incidence. Others may know an electrician or a plumber but the whole process of getting bids and figuring out what the real cause of the problem is, let alone getting it solved, takes a lot of time. The best thing to do as a new home owner is to have a home warranty.
What is a home warranty?
A home warranty works almost like an extended warranty or insurance policy you would buy for your flat screen TV or Smartphone. It covers the costs for replacing or repairing almost anything that may at some point cease functioning in your home. Typically, payment plans range from $300 to $900 per year.
The only thing that you will have to do is contact your home warranty provider either by phone or by submitting a ticket online. The warranty provider will then contact the company or contractor they have a contract with. The company will then send someone to solve the problem by either fixing it or replacing the malfunctioning item all together. All the repair or replacement costs will be covered by your home warranty premium and you will only be required to make a co-payment for every incident.
Who should buy a home warranty?
Home warranties are especially good for first time Millennial and Gen X/Y home buyers who are usually accustom to renting. These former renters may often be so inclined to call the landlord every time a problem arises. Your new home warranty provider will essentially take over the role of your former landlord. These home owners often work for long hours and may not have the time or energy to call around and find an electrician or a plumber to get appropriate estimates from. Having to wait through the 12-4pm window for the repair person to come to your house may also not be so appealing.
Repairs whether expected or unexpected may be too costly and you may have to go through a rather lengthy process before you get the problem resolved. You can avoid having to deal with this process on your own by setting up a home warranty.
Home warranties are not limited to only Gen X/Y and other first time home owners. Any home owner at any age can buy a home warranty any time. So there is some flexibility when it comes to purchasing your own home warranty.
If your home has been inspected, then you know the life expectancy & the condition of most of your utilities. Generally, most appliances break down after around 15 or 20 years and you don’t want to deal with several malfunctioning things at the same time.
Before you do purchase a home warranty however, it is advisable to shop around and compare the various premiums & coverage plans valuable to make sure that you get a good deal. Remember that an older home will definitely need more coverage.
Investors who may not want to be doing repairs for their tenants should also consider home warranties. This should especially be considered by real estate investors who are not as experienced with the typical amount of upkeep a property will require. A warranty will also prove very useful if you don’t have a network of repair people available to help make the repairs. A home warranty will keep both you and your tenants satisfied and happy.
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