Introduction: Home repairs


Whether you are buying or selling a home, its condition should be your top priority.  A home warranty helps make that sale happen.  What a home warranty is, what a home warranty covers, whether or not home warranties are worth it, and how having one can help you out will be discussed at length here.

what does a home warranty cover

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How much do US homeowners spend annually on home repairs?

According to the National Association of Home Builders (NAHB), a Washington-based organization with a membership that includes firms and contractors involved in every aspect of home building, repair, and maintenance, Americans spent $150 billion on home improvements & repairs in 2013.  This is low compared to annual averages recorded in the past decade, as illustrated in the same report.

are home warranties worth it

Image source: eyeonhousing.org

 Post-recession, home improvement and repair expenses are only now beginning to pick up pace.  Based on the 2015 TrueCost Report released by HomeAdvisor, the online platform where homeowners and home repair and maintenance service contractors meet, homeowners spent, on the average, $500 on maintenance works in 2014.

Yet, despite this fact, very few people seem to have a good grasp of what a home warranty is and what home warranties cover.  Cash on hand is the preferred mode of payment for 92% of homeowners in getting home repairs and improvements done, according to the same report.

This annual spending on home maintenance is rather conservative.  For instance, getting your home’s air conditioning system fixed can cost $316 on the average to as much as $900.  An additional furnace repair will cost you $268 on the average up to $800 or more, while a plumbing system repair will require between $281 and $790.

The steep cost of maintaining your home and having to cope with emergency repairs can be rather challenging, even if you choose to DIY.  That leaves many homeowners asking the question, “Are home warranties worth it?”



What is a home warranty?

Before you can begin to understand what a home warranty is and appreciate what it can do for you, you will first have to accept that nothing lasts forever, not even that expensive home spa or refrigeration system you have installed at home.

So, what exactly is a home warranty?  It is a warranty that covers your home systems and appliances for any emergency repairs.  It shields you from expensive out-of-pocket expenses.  In short, a home warranty lets you have peace of mind that when your plumbing system breaks down, you won’t have to break the bank to get it fixed.

That also means that what a home warranty covers matters.  Home warranty companies will typically have a basic, annual home warranty priced at $500 or less.  Still, these companies let you tailor-fit your coverage so that you may obtain exactly the services that match your most compelling needs and objectives for having your home covered.

More details as to what a home warranty is and what it is not below.


What does a home warranty cover?

For starters, a home warranty contract is not the same as your home insurance policy—and that is exactly why you need it!

So, what does a home warranty cover that your home insurance does not?  Well, while a home warranty and home insurance both help you have peace of mind in the event of property loss or, even burglary, these two policies have very different objectives and coverage.

Home insurance gives you the confidence that you can recover your home’s market value.  It lends you support in rebuilding your home following a complete or partial destruction whether the damage or loss is due to acts of God or man-made disasters.

Home insurance covers the loss of structure but not the maintenance and repair requirements of your electrical and plumbing systems, which can be hard on the budget, particularly in the case of sudden damage.  Your home insurance will not pay for an HVAC system that breaks down nor will it finance the repair for a home spa system that suddenly goes haywire.

A home warranty will help keep your head cool and your pockets filled in all of these circumstances.  It allows you to get your system or appliance repaired or even replaced quickly with the help of the most qualified home maintenance service professionals.  In most cases, you only need to call a service hotline number, and your home warranty firm will take care of the rest—absolutely no need for you to check local directories and validate the qualifications of the repair crew.



Are home warranties worth it?

The answer is a reverberating “yes!”  Below are the top five reasons that answer the question ‘why are home warranties worth it?’

  • First, a home warranty lets you keep your home in tiptop shape without having to spend too much on periodic maintenance and necessary repairs.  That way, you can enjoy the utmost comfort and convenience right where you live.
  • Second, home warranties are worth it because they guarantee that you will receive immediate assistance for nearly all types of home repair.
  • Third, home warranties can provide access to pre-qualified home service contractors. You won’t have to worry about getting poor quality or even unqualified handymen to service your urgent home repair requirements.
  • Fourth, home warranties are worth it because efficient and high quality home repair services are made available for a minimal cost, and you won’t ever have to DIY your home repair needs.  After all, you may be doing more damage than good whenever you do.
  • Fifth, home warranties are worth it because covered homes automatically command a higher market price.  This benefit comes in handy should you decide to sell your house. 

So then, home warranties are worth it, not only for you but also for the next homeowner who gets to buy your warranty-covered home.  Home buyers and real estate agents alike now prefer to purchase homes that have home warranty coverage over ones that don’t.


Common home warranty complaints

On September 6, 2014, ConsumerReports dinged the credibility of home warranty companies.  The article discusses at length the home warranty complaints raised in court by a consumer group in New Jersey against a specific home warranty company.

In general, the most common home warranty complaints, including those noted on Home Warranty Companies, the website that helps you find the right home warranty company for your needs, and Angie’s List, the website that publishes the complaints of disgruntled consumers in the US, can be summed up as follows:

  • Home warranty companies make it hard for covered homeowners to make claims.  For instance, home warranty companies have been accused of excluding coverage, alleging pre-existing damages and damages resulting from poor maintenance and care on the part of the homeowners.
  • Urgent home repair support services are hardly provided efficiently.
  • Services are overpriced.
  • Home warranty companies appear to deliberately avoid payment of significantly costly repairs and replacements, and often find cheaper alternatives like buying out instead of replacing worn appliances.

 Some of these complaints may be rooted on the negligence of homeowners to read and understand their home warranty contracts in detail.  It is important to read the details of your contract to know just what your home warranty covers and what it doesn’t.



How to make the most of your home warranty coverage

Below are some tips by which you can make your home warranty work for you:

  • Collect and compare home warranty coverage from different companies.  You may start by comparing the packages offered by a handful of home warranty companies, particularly examining what a one year home warranty covers under each.  Shop around for the best deal, and don’t forget to check the company’s credibility and quality of service.  Ask your relatives, neighbors, and friends about their home warranty coverage and find out if there is any company that several of them highly recommend.  You may also want to check out how home warranty companies are rated on the Better Business Bureau, a non-profit organization that promotes consumer confidence on businesses operating in the US and Canada.
  • Study your coverage plan and options well.  Home warranty companies will often have coverage packages that range from basic to premium, and the cost of the plan varies, of course.  Most companies will also give you the option to customize your coverage.  So, for instance, if you have a pool which is maintenance heavy, you can include it in your plan as well.  Tailor-fit and negotiate your plan with your home warranty provider so that you can get more benefits beyond what home warranties typically cover.
  • Take the time to understand what your home warranty contract covers and what it does not.  Know exactly what you can and cannot claim so you’ll have a better idea of how you can deal with a broken appliance or home system if and when they do break.
  • Keep your home systems and appliances in good condition by availing of routine maintenance checks.  Even if you have home warranty coverage, it is in your best interest to keep your home assets operating at optimum performance levels.  So, don’t wait until they break before you have them checked.

Conclusion

So, what does a home warranty cover?  It covers all the valuable systems and appliances inside your home, alright.  But, making sure that your home warranties is worth it and ensuring that your contract works in your favor involves careful scrutiny.  Do your homework, run the numbers, and seek the advice of other home warranty holders before deciding if a home warranty is right for you.



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