Let’s get to the bottom of it: A home warranty is a renewable home service plan that covers your systems and appliances, including hot water heaters and air conditioning systems in the event of a breakdown. Homeowners insurance policies often cover catastrophes, so warranties are intended to help pay for things that are broken down by wear and tear and everyday use.
How it works?
A home service plan is optional, but it is often a good idea to buy, according to Raj Midha, general manager and senior vice president of American Home Shield, a guarantee company. This policy will typically cost between $ 50 and $ 75 a month. This low price can pay off in a huge way.
According to Midha: “Let’s say your air conditioning system stops working. In this case, a qualified and independent service contractor will be assigned to assess the problem. If it is determined that the system is no longer working due to age or wear and tear, and the breakdown is covered under the terms of the service contract, the repair professional will make the repair or, if necessary, replace the appliance or system component with only the cost of the service call. “
Midha’s company covers the costs according to the plan you have chosen. It says: “A one-time service call costs $ 75, $ 100, or $ 125 depending on the amount you choose in advance when you become a member, and American Home Shield pays the remaining amount for repair or replacement according to the plan you you have selected. “
As for what it does not cover, it shared that: “In general, a home warranty does not cover events such as fire, smoke, theft, tree falls, or weather damage, which are covered by home insurance. home”.
Who needs it?
If you live in a new home, you may not think you need a home warranty. However, Midha shares that it is still a great investment for any homeowner. He said: “They are suitable for any type of customer, due to the wide range of customization options and additional coverage, but it can be a particularly wise decision for homeowners on a budget, homeowners more old buyers or a new home. buyers who chose to waive their inspection contingencies “.
He continued: “Protecting a home service plan can save you hundreds or even thousands of dollars in your pocket, as well as the headache of finding a trusted service contractor to do the repairs.”
Who doesn’t need it?
Of course, this does not mean that absolutely everyone needs a home warranty. Most importantly, the warranties depend on whether the owner has been maintaining these items, as the warranties do not cover damages caused by the owner’s negligence.
Another downside is that if an item was damaged without repair, you may not be able to choose a replacement. Of course, just like insurance, you will pay the premium regardless of whether you use the service or not.
How to get it
While it is often advertised as an advantage to buy a new home, you can still get a policy at any time. Midha shared: “Once you buy a plan, you can start using your home warranty after the 30-day waiting period, which is an industry standard.”