Our homes are important to us, and we will do whatever we can to protect them. You can install an alarm system or get a guard dog, but what about protecting your home from different threats, like normal wear and tear? This is where a home warranty can help. A home warranty is a service contract that covers household systems and appliances when they break down due to everyday use.
Many standard home warranty plans cover all the parts and components of your home’s electrical, plumbing, heating and air conditioning systems, as well as many other home appliances. Of course, there are a wide variety of coverage options depending on the plan and provider you choose.
A home warranty is different from homeowners insurance. Homeowners insurance pays for damage and loss caused by outside forces such as fire, weather, or even vandalism. If any of these events damage or destroy a portion of your home, homeowners insurance would help you rebuild and replace your lost and damaged belongings.
A home warranty covers the cost of repairs and replacements of certain appliances and systems in your home caused by everyday wear and tear, or from old age. Examples of appliances and systems that may be covered in a home warranty plan include washers, dryers, oven ranges, furnaces, and hot water heaters. While individual appliances may initially be covered under manufacturers’ warranties, these only last for a predetermined period of time. Home warranties provide protection regardless of the age of the appliance or system. Here is a list of common appliances covered by a Home Warranty Policy…
- Garage Door Systems
- Electrical Systems
- Plumbing Systems
- Oven & ranges
- Trash Compactors
- Ice Makers & Ice Machines
Like other types of warranties or service contracts, home warranty plans have limitations on their coverage. Typically, home warranties do not cover the modifications or changes required when new equipment is installed. For example, if an HVAC system needs replacement, electrical or structural modifications may be required to accommodate the new unit. The best way to know what is covered in a particular home warranty plan is to read the contract thoroughly.
A good rule of thumb to remember, though, is that a home warranty generally covers the mechanical parts of a system or appliance. That means the handles that you use to open your oven are not covered because they do not affect how the oven cooks your food. But if a heating element goes out in an oven due to normal wear and tear, that would be included in a home warranty as it is a mechanical part. It is important to note that most home warranties only cover damage caused by normal wear and tear.
If you do not maintain the systems and appliances in a home, causing them to work harder and burn out faster, they probably will not be covered by a home warranty when they fail. Part of a home warranty contract is making sure that a homeowner makes a reasonable attempt to keep things running correctly while they own the home. In order to get a better understanding of some of the basic appliances that are covered by a Home Warranty Policy, please reference the image below. This will also help you determine how home insurance compares to home warranty coverage… Image Source
Some home warranty contracts have limits included on them. This may be set as an overall dollar amount, or on certain items within the contract. Some home warranties will cover anything on their contract up to a certain amount of money and then will no longer pay for repairs and replacements, regardless of if it would be covered with the contract.
Other home warranties have limits on certain items where they will pay up to a certain amount for a repair or replacement, and then the rest must be covered by a homeowner. It is important to look at limits while looking at a home warranty contract. Some home warranties are cheaper but have low limits on many items they cover.
All in all, purchasing a home warranty is a good thing to consider for homeowners because it can actually save you money in the long run. Make sure to get the most out of your home warranty by reading the contract and knowing what to expect. It is important to be sure of what will be covered and what won’t be covered with your home warranty.