So what is a home warranty anyway? In a nutshell, it's a policy you pay for that covers the cost of repairing many of your home appliances if they break down.
Many people buy a home warranty right when they close on a home, since such protection can provide some much-needed peace of mind that you won't get hit with unexpected expenses soon after moving in. You can still purchase a plan after you move it, but the cost may be more expensive.
What Does a Home Warranty Cover?
Don't mistake a home warranty for homeowners insurance, which covers your home's structure and belongings in the event of a fire, storm or other accident. A home warranty in comparison, will cover repairs and replacements on systems and appliance due to normal wear and tear - no calamities required.
A home warranty generally covers:
How Much Does A Home Warranty Cost?
- Electrical Systems
- Plumbing Systems
- Heating and Cooling Systems
- Washers and Dryers
- Kitchen Appliances; such as, the oven, range, garbage disposal
While home buyers are often required to get homeowners insurance along with their mortgage, home warranties are a fully optional purchase. Basic coverage starts on average at $300 and can go up depending on the kind of coverage you choose. It is best to purchase this when you are first buying the home to get the best deal. After the first year you can drop the coverage or most companies will offer you a chance to renew your current plan.
Do your research and see if a home warranty is right for you. Also, check with the Better Business Bureau to see if there are any complaints on the company you are thinking of using. If you are in the process of purchasing a home, ask your realtor for advice.
Better Business Bureau:
Home Warranty Reviews