Many homeowners are aware of the benefits of traditional home insurance. Home insurance covers major incidents in the home, such as fires, floods, and break-ins. Areas that home insurance is lacking in coverage include appliances, electric systems, and plumbing systems. This additional coverage can be quite affordable and covers gaps that traditional home insurance misses.
- Home Warranty Pricing
How much does a home warranty cost? The cost of a warranty can vary between insurance companies. When gathering quotes, be sure to compare more than just the cost of the insurance. Remember that not all policies are created equal.
For example, two companies charging the same amount may not have comparable coverage. One policy may exclude specific appliances, while a different policy of the same price could cover all of the major appliances in the home. When shopping for home warranties it's smart to compare the cost of the warranty as well as the coverage included and excluded. Writing down a list of covered and non-covered items on paper can help a person compare multiple warranty policies.
Another feature to consider is out of pocket costs, services fees, and deductibles. When an appliance in the home breaks down, the homeowner typically has a flat cost that they have to pay per incident. The home warranty policy may refer to this as a deductible or a service fee.
The homeowner can also be responsible for a percent of repairs. Always find out what costs will be the responsibility of the homeowner before signing on the dotted line. Be sure to compare all of the out of pockets costs for repairs, as well as the upfront fee for the home warranty coverage.
- What Does a Home Warranty Cover?
Each company offering this type of insurance will have a specific list of items that are covered, as well as items that are excluded. Many companies cover appliances. This can include refrigerators, freezers, washing machines, dryers, dishwashers, built-in microwaves, ovens, trash compactors, and more.
On top of standard home appliances, a home warranty can cover other electrical items around the home. Policies can include coverage for water heaters, thermostats, heat pumps, air conditioners, heaters, automatic garage doors openers, and central heat and air systems. Some plans may cover the entire electrical system in the home.
Many people wonder if they can get coverage for their swimming pool. Some companies will cover the pool on the policy. This means if the pool pump goes out or there is an electrical problem, the home warranty could help cover repair costs.
Those that don't use city water can also benefit from a home warranty. Many warranty companies will include water well coverage. Water well repairs are not cheap, and this coverage can save a homeowner thousand in repair costs if something goes wrong.
- What is Excluded from Home Warranty Coverage?
Every policy will have its own list of exclusions. Any damage purposely caused by the homeowner or their guests will not be covered. Any damage caused by misuse of an appliance or negligence will also not be covered. This means that if an air conditioning system breaks because it didn't have regular maintenance and filter changes, the repairs will not be covered.
This type of warranty only covers damage and broken items when they occurred through no fault of the homeowner. A home warranty will also not cover things that traditional homeowner’s insurance will cover. Home warranties usually exclude repairs to windows, doors, walls, and pre-existing issues. An electrical portion of a door, such as a garage door opener, may still be covered as it is electric.
Outdoor sprinkler systems are another item that usually isn't covered with this type of warranty. There are many warranty companies that will allow a person to add in this type of coverage though, so don't feel discouraged. Just be sure to ask if an outdoor watering system is excluded, and then ask how to get it added to a policy.
Also, keep in mind that damaged caused by a fire or a flood in the home will not be covered by this type of warranty. Damages from natural disasters are also excluded. These items are typically covered by traditional homeowners’ insurance.
- Additional Coverage That Can Be Added
While certain home items and systems are automatically covered in this type of warranty, there are some items that a warranty company may allow a homeowner to add to a policy. As discussed before, a person can add on coverage for a swimming pool.
Other items that a homeowner may want to add coverage for include a spa or hot tub, a wine cooler, a home septic system, a roof leak, water softener coverage, coverage for water wells, extended pipe leak coverage, and additional appliances in the home. Those who are unsure if certain additional items can be covered under a home warranty policy should contact the company and ask. Make sure that these additional items are written into the policy so that if there ever is a problem the coverage is listed in writing.
- Who Should Have Home Warranty Coverage?
Every homeowner should consider getting home warranty coverage. Experts say that twenty percent of appliances break down in their first four years. They also say that almost seventy percent of homeowners have to make repairs to a home annually that are not covered by traditional homeowners’ insurance.
Unless a homeowner can afford to pay for full repair costs out of pocket, they should look into getting a home warranty. Anyone and everyone who owns a home should at least educate themselves on the coverage offered in their area. Getting this type of coverage can mean that if something does go wrong that the homeowner isn't stuck paying thousands of dollars out of pocket in repairs or replacement costs.
In conclusion, adding a home warranty is a smart decision for homeowners. This coverage can save people thousands of dollars each year on surprise home repair costs. For those who don't have thousands of dollars sitting around to spend on home repair costs, this coverage can be a lifesaver.