Many people don’t know the difference between a home warranty and homeowners insurance. It’s helpful for you to know the differences between the two in order to determine if home warranties are worth the cost to you. Warranties on anything are basically a contract. This kind of service contract states which home assets the company is willing to compensate you to get it fixed or even replaced.
Now, a home insurance policy is like any other insurance policy. It covers the loss of your home and the contents of it if they are damaged due to natural causes, lost, or even stolen.
Home warranties can cost you anywhere from $300 to $800 annually. This typically covers kitchen appliances, your plumbing, the furnace, tubs, water damages, washer, dryer, air conditioning, refrigerator and even your garage door! In a sense if anything goes wrong with any of these appliances/assets in your home your home warranty is there to cover it.
Be advised that there may be a premium when using your home warranty. This premium works like a deductible on a home insurance policy. There is no guarantee that you will have a premium, And hey, if you don’t that’s just keeping more money in your pocket! Owning a home has many benefits and the ability to have a warranty on it incase things go south is just one to add to the list.
Let’s say it’s just after the Holidays and you are trying to catch up on all your bills. As soon as you think your back up to speed your stove goes out! You’re short on cash this month but you need your stove to cook food for your family. There’s where that warranty comes in handy. However, Since it is a service contract before you buy any home warranty you will need to thoroughly read the contract and ask as many questions as you need to understand what it covers as well as what it doesn’t cover. You want to spend some time shopping around for a service that fits your individual needs.
A prime example of this is that some warranties won’t cover the appliance if you haven’t held up your end of the bargain and maintained it well enough to fit their standards. If you just signed the dotted line before fully understanding what you were getting yourself into, be prepared for an eye-opener!
All in all, I personally think it is worth the cost to purchase a home warranty. Being an avid money saver I’d say this is a smart move to make for any home owner.