The Benefits of Home Warranties for New Homeowners
A new home is a large purchase for home buyers, and, especially when buying a resale home, homeowners may want added security in knowing that they will be protected in the event that one of their major home appliances fails. If you want the security of knowing you’ll be protected financially in the event that something in your house fails, consider getting a home warranty for your new home.
A home warranty is a service contract on the property you purchase that covers certain items when they stop working.
Buying a Home Warranty for Resale Homes
You have closed on your home, and it is now yours, no matter how good or bad the condition of the home. Much of the time, this isn’t an issue. However, that isn’t the case when something breaks or goes wrong. Whether it is a week after closing or three months down the road, the frustration is the same. And this is where a home warranty can aid a homeowner.
A home warranty won’t cover everything, but it does cover many of the major components of your home, such as the HVAC and hot water heater, among other things. Home warranties will provide repair or replacement of any covered items when an accompanying service fee is paid.
For an annual fee in a range of $400–$800, the major mechanical components of your home, including appliances, garage doors, HVAC systems, hot water heaters and more are covered. Warranty cost factors in the size and age of the home as well as other optional features such as pools, refrigerators, washers and dryers. A warranty is an annual expense, so you will need to pay a renewal fee annually to maintain coverage.
Buying a Home Warranty for New Construction Homes
Just because it’s new doesn’t mean nothing will go wrong. With a new construction home, many builders provide their own warranty service, which can protect their buyers and also service the builder. While this can vary, it is common to see one-year coverage for the builder's workmanship and two years for repairs and replacement of failing components such as such as windows, heating, ventilation, doors and trim, air conditioning, electrical systems, and plumbing.
Read the warranty and understand what is covered. You may decide you want to purchase a separate warranty from the builder’s warranty that covers additional components not covered by the builder's warranty.
Home Warranty Benefits
It is easy to see the benefit of a home warranty when something breaks and it is covered. Instead of calling for repairs direct, call the warranty company and they will assist you with this process. Because of the minimal annual expense of a warranty, it doesn’t take a long time to see the benefit when something breaks down.
What if you don’t use the warranty each year, is it still worth it? That depends on the price you are willing to pay for peace of mind to feel comfortable knowing you are less likely to spend thousands on an unexpected repair. When it’s possible to spend thousands of dollars on repairs, some find the cost can be worth it.