The Pros And Cons of Home Warranties: What You Need to Know
Home warranties have become more common today. People are learning this is an option thanks to the advertising many of these companies do. While these programs offer numerous benefits, they do come with drawbacks. A homeowner must know the good and bad about home warranties to make an informed decision about whether this purchase is right for their needs.
Save Money
Many people find they need a home warranty so they can budget for household repairs. Items can break at any time, and they can be costly to repair. If a person doesn’t have money set aside for the repairs, they may need to put them on a credit card. Doing so makes the repairs even more costly once the interest is added. With a home warranty, the homeowner pays the service fee and deductible and the company takes care of the remainder up to the amount listed in the policy.
Excessive Coverage
A person might purchase a home warranty only to find they never use it. Either items in the home don’t need repair, or the items in need of repair are covered under the manufacturer’s warranty. This is one way a home warranty is similar to homeowner’s insurance. A person may pay on a policy for years and never use it. It is up to each person to decide how much risk they want to take on, as a home warranty is an optional purchase. Mortgage lenders don’t require it like they do homeowner’s insurance.
Peace of Mind
A person can have peace of mind knowing their home is cared for. They won’t have an expensive repair that must be put off because they cannot afford it. When something breaks, they simply call the warranty provider to have it fixed. Budgeting becomes much easier when this home warranty is in place.
Renters Can’t Benefit
A renter cannot purchase a home warranty. Only the owner of the home can take this step. The renter may be financially liable for any appliance repairs or replacement. This depends on how the lease is written, so every renter must read the fine print of the lease agreement before signing on the dotted line.
Older Appliance Coverage
The longer a person uses an appliance, the higher the risk of this appliance breaking down. When a person has a home warranty, they are protected in these situations. The warranty company finds a provider to make the repairs and will pay for an appliance up to the amount listed in the policy if a repair is not possible.
Warranty Exclusions
However, warranties don’t cover all damage. Any damage resulting from an act of nature will not be covered. Sadly, these damages tend to be the most costly. Turn to the homeowner’s insurance in these situations to see if the insurer can be of help.
Plan Options
Most warranty providers offer a range of plans to meet the needs of more homeowners. This allows each person to choose the level of coverage they feel most comfortable with. They can know those appliances they use most often will be protected.
Limited Say in Contractors
Warranty companies partner with certain contractors. A homeowner must accept who the warranty company sends to handle the repairs. They cannot pick and choose which company they want to use. To avoid this problem, a homeowner should research which contractors each warranty company partners with. However, remain aware that this list can change with time.
Home Value Increases
A home warranty increases the value of the house. The warranty ensures the home is well cared for. This will be of importance in the future when the time comes to sell.
Repairs Before Replacement
Warranty companies always attempt to make repairs rather than replace an appliance or system. This could lead to more repairs being needed soon. Some homeowners find this frustrating and choose to replace the appliance with money from their own pockets.
Countless homeowners enjoy having a home warranty because they know they are covered if something goes wrong. However, they need to compare various plans to get one that meets their needs and fits their budget. In addition, they need to read the fine print. Doing so ensures they know what is covered and what isn’t, so they aren’t frustrated when they have to pay for a repair or replacement that the plan does not cover. This remains the biggest complaint seen with home warranties, and it can be easily avoided by reading the contract carefully.
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