Purchasing your very first house in many ways feels like you’ve achieved a milestone, or perhaps your dream. Despite all the enthusiasm and excitement that it brings, there are some things every homeowner should know.
Even if the home you’re purchasing isn’t exactly new, there’s a possibility that you will be offered a home warranty. This warranty works very much like a safety net against unforeseen repairs that can turn out to be very expensive.
But is a home warranty the ideal safety net that most homeowners expect? Well, that’s why we’re here today.
Apart from home warranties, you should also consider home repair and protection plans. Ohio Edison FirstEnergy Home offers some of the best coverage plans at the most reasonable rates.
Nevertheless, let’s see what a home warranty is, what it’s worth, and its benefits to a homeowner.
What is a Home Warranty?
First, let’s clear up the misconception many have about home warranties. A home warranty is different from homeowners insurance. Homeowners insurance covers major damages, like hail, fire, property crime, and even specific water damage that can impact personal possessions or the house’s structure.
A home warranty is a signed contract between a home warranty company and the homeowner. These companies provide repair and replacements services on major parts of the house, like the HVAC, electrical, and plumbing systems, mostly at a discounted rates.
Moreover, a home warranty may also cover electrical appliances, like refrigerators, washers, dryers, and even swimming pools. Homeowner’s insurance rarely provides coverage for such components.
The cost needed to fix home appliances might not even meet the insurance policy’s deductible. Home warranties are usually offered during the time of purchase. The seller might even offer to purchase a home warranty to give you the peace of mind that any repairs costs will be minimal.
Even so, you’ll be approached by several mail solicitations to buy a home warranty whenever you decide to close the deal for the home. If something were to break down, all the homeowner needs to do is call their home warranty company, who will send their service providers over to look at the problem.
How Much Does a Home Warranty Cost?
A home warranty typically costs around several hundred dollars per year. Homeowners could either pay up-front or if their warranty company has a payment plan, they could pay in installments.
A home warranty plan’s cost ultimately depends on the type of property you’re purchasing. It also depends on if you, as a homeowner, decided to buy a basic or an extended plan.
Let us clear another misconception homeowners have about a home warranty; the plan’s cost does not depend on how old the property is unless it’s brand new, which then you can expect to see a rise in the price of coverage.
Moreover, garages need coverage as well in a home warranty plan. Also, be mindful that most home warranties also charge a service call fee, also known as a trade call fee, apart from an annual premium fee.
The service call fee is charged when a homeowner requests a service provider be sent to the house to examine a problem. If the problem requires different types of contractors, like an electrician and plumber, then there’s a chance the homeowner might have to pay a service fee for each of them.
Let’s be clear that a home warranty in no way means that all home repairs are going to be of no cost to the homeowner. Certain problems aren’t covered in the warranty plan, whether the homeowner didn’t buy coverage for those items or because the home itself hasn’t been appropriately maintained.
Home Warranty Benefits
Like all kinds of warranties out there, a home warranty aims to protect a homeowner against costly, unplanned repair bills and provide peace of mind. A home warranty serves best for those who don’t have disposable income or are saving up for other things; it acts as a buffer between costly repairs and a homeowners savings account.
More than that, a home warranty also suits people who aren’t exactly handy or don’t want the hassle of contacting a contractor whenever there’s a problem. It also makes sense for homeowners who tend to have expensive tastes for their home appliances.
The Bottom Line
Home warranties are a subject that is bound to come up whenever there’s a sale or purchase of a house. A home warranty, in many ways, provides a sense of peace to a home buyer who may have a limited understanding of how well-maintained the components of the house are.
It’s important to carefully read your home warranty plan and know if it fits your needs and budget.