After buying a home, you’ll usually be offered a home warranty for added protection. If you’re unsure of what exactly a home warranty is or if you’ve heard bad things about these, you’re not alone! Home warranties are typically surrounded by a lot of confusion.
Understanding what home warranties are and how they work will help you better provide your home and its features with the right protection from inevitable wear and tear. So, let’s set the record straight. In this article, we bust the most common myths about home warranty policies.
Myth: Home warranties are the same as home insurance
People often mistake home insurance policies to be the same as home warranties. While they both give you financial protection from unforeseen circumstances or damages, the similarity stops there.
Fact: The coverage of home warranties and home insurance policies are vastly different. Home insurance focuses on remuneration after disaster scenarios like theft, fires, and the like.
Meanwhile, home warranties are there to protect your appliances and home systems. The standard warranty includes repairs when any of these appliances and systems break down but some policies can offer replacements for worst-case scenarios.
Myth: Home warranties only cover brand new appliances
A common misconception is that warranties would only cover new appliances. In relation to that, home warranties are thought to be associated with a new home purchase.
Fact: Home warranties can cover appliances that you already own, as well as brand-new ones.
For those with older appliances, it might even be better to get a home warranty because of the wear and tear these items have been through. Repairs, especially for earlier product models, become more difficult and expensive as the years go by. A home warranty allows you to place these appliances and systems under its coverage, resulting in significant savings in the long run.
If you’ve equipped your home with brand new appliances, consider getting a home warranty anyway. Even new appliances and home systems could break down unexpectedly for one reason or another. Thus, it’s smarter to protect yourself from potentially expensive repairs or replacements.
The extent of a home warranty’s coverage may depend on the kind of policy you applied for. Some may offer a lot more for higher charges, but the extra coverage may not exactly be useful to you. That’s why you should carefully consider your needs as a homeowner to figure out the best kind of home warranty coverage for you.
Myth: All home warranties are expensive
Because home warranties cover repairs and/or replacements of major appliances and home systems, people assume that these must be expensive.
Fact: The premiums on home warranties vary based on the extent of your coverage and your company provider. Some are pricier than others, but there are also plenty of worthwhile policies on the lower end of the scale.
A basic home warranty plan may cost around $350 to $500 a year with the additional one-time service fee when you need to call for maintenance. This is a relatively small price to pay compared to the typical out-of-pocket repair costs that could reach over a thousand dollars.
Myth: Every home warranty company is the same
Most home warranty companies offer the same basic repairs and replacement services for appliances and home systems. Some homeowners assume that these companies are interchangeable so they don’t look further into their policies and service agreements.
Fact: Each home warranty company has its own set of policies regarding the appliances they’ll cover and repairs they’ll do.
To get the most out of your homeownership, find a home warranty company offering policies that can best suit your needs. Ask questions about the history of the company, claiming procedures, customer service support, and their edge over other companies. Also, search through their reviews online to see what past clients have to say about their services.
Myth: A home warranty covers all appliances and home systems
When applying for home warranties, some homeowners get the false impression that everything from their toaster to their HVAC system will be covered. This common misconception is why home warranties sometimes get the reputation of being unreliable.
Fact: A typical home warranty policy doesn’t include every single appliance in the home. It only covers major ones like the refrigerator, oven, dishwasher, heating and cooling units, and electrical wiring.
If you want to add other appliances like a second fridge or mini-split systems, ask your home warranty provider if they can cover those features, as well. Keep in mind that home warranties have different clauses and exceptions. Also, make sure to read your contract carefully to ensure that your appliances are fully covered.