Who Should Consider a Home Warranty?

When buying a new home, a home warranty can provide invaluable peace of mind against unexpected repairs and breakdowns of major home systems and appliances. But before rushing to purchase a home warranty, it's important to carefully consider if it makes financial sense for your particular situation. Home warranties can have significant costs in the form of monthly premiums and service fees. Determining if a home warranty is a wise investment requires looking at factors like the age of the home, typical repair costs in the area, and your personal risk tolerance. If those factors indicate a home warranty would bring value, shopping around for the best home warranty company and customized coverage is key to getting good value.

New homes in good condition may not benefit as much from a home warranty. New construction homes often come with a warranty from the builder covering defects for the first year or two. But homeowners should remember that busted water pipes in sub-zero weather are NOT builder defects. And all homes have warranties on new appliances and systems that may make an additional home warranty redundant. 

On the other hand, buyers of older homes can gain great peace of mind from a home warranty. Older systems like furnaces, air conditioners, and water heaters are more prone to breakdowns. And repairs or replacements can easily run thousands of dollars without a home warranty. Those buyers without much set aside in savings may find great value in avoiding these unpredictable major expenses.

Tips for Shopping Around

When shopping around for a home warranty, coverage and costs can vary widely between companies. It pays off to get multiple quotes and understand what is and isn’t included by each company. Key factors are dollar limits per claim and per year, which systems and appliances are covered, service fees per visit, and contractor quality. Top-rated home warranty companies often provide an online form to get quotes from multiple providers at once.

A good home warranty company vets their contractors thoroughly and monitors customer satisfaction. They offer customizable coverage options at reasonable rates for your area with minimal service fees. Checking reviews by current customers gives great insight into how well companies are at responding quickly to claims and paying contractors on time.

Who Stands to Benefit the Most?

First-time homebuyers are also prime candidates for home warranties. New homeowners often underestimate maintenance costs and are simply not prepared to pay for exorbitant repairs. After all, they may be used to a landlord or maintenance department taking care of it. The last thing any new homeowner wants is a four-figure bill to replace their broken air conditioning unit or flooding damage from a burst pipe. 

Anyone buying a home in an area with high repair and construction costs can also benefit from warranties. Simple repairs in a high-cost-of-living area can run shockingly high bills. Areas prone to natural disasters like floods, tornadoes, hurricanes, and earthquakes also have elevated home repair costs. Homeowners insurance helps cover disaster damage but not routine breakdowns, making a home warranty a wise companion policy.

For anyone buying an older home, living in an area prone to natural disasters, or wanting to avoid unpredictable repair bills, a home warranty brings valuable peace of mind. And taking the time to shop around ensures you select reputable coverage at a fair price. Protecting the major investment that is your home is well worth the effort.