Your home is likely the most significant investment you will ever make, and it will affect your finances for years to come. Not only do you have your monthly mortgage to worry about, but there is also homeowner’s insurance, as well as regular maintenance, upkeep, and repairs that you will need to take care of.
When money is tight, the need to fix appliances and systems in your home can be overwhelming or impossible to manage. If these fears keep you up at night, take comfort in knowing that help is available.
If you do not believe you can afford to pay to repair or replace items in your home when they stop working, you can turn to a home warranty for your Texas home. This coverage can give you peace of mind when you otherwise might have to put off repairs. Once your home warranty expires, it makes sense to renew it.
Some people confuse homeowner’s insurance with a home warranty. There are similarities, but there are key differences as well. Insurance is required when you obtain a mortgage loan. It covers damage and loss to your home in the event of a disaster or catastrophe such as a burst pipe, fire, falling objects, high winds, or theft.
A home warranty, on the other hand, is a voluntary purchase. It is an agreement between you and the warranty company that you will pay an annual or monthly fee in exchange for repairs or replacement of particular items in your home that break down. This could be due to normal wear and tear or sudden, unexpected incidents.
A warranty typically lasts a year and can cost between $300 and $700 annually. It covers dishwashers, washers, dryers, stoves, ovens, refrigerators, and water heaters. The warranty also applies to systems such as the HVAC, electrical, and plumbing in your home. You can even opt for a warranty that covers the roof, sprinkling system, and swimming pool if you have one.
There’s an old saying: “You get what you pay for.” This implies that if you don’t spend much money on an item, it is not likely to be high quality or last long. Conversely, if you invest more money on your purchase, it will usually do its job well and for a more extended period.
However, even the most well-made items will not last forever. You can count on your appliances and systems to have a limited lifespan. At some point, they will not function correctly or at all.
Buying and then renewing a home warranty is an excellent way to plan and prepare financially. You don’t know exactly when these items will break down. However, if you have a warranty, you can have financial protection whenever this does occur.
Depending on the company and the specific plan you opt for, you can automatically renew your home warranty. Otherwise, you would need to contact the plan provider at the end of the term to let them know that you either want to renew or not renew.
Occasional, minor repairs to appliances and systems may not seem like much, but these associated costs can quickly add up.
For instance, to replace parts on a fridge or dishwasher, you could quickly pay $100 or more. Major repairs on these items can rise to a few hundred dollars, depending on the issues. Fixing an HVAC or electrical system is even more expensive. To have something like this repaired, the price can reach several hundred dollars or even more than a thousand.
If repairing these items is not possible and you have to replace them, you may have to pay well over a thousand dollars. Some replacements can run in the $10,000 range. If you compare these costs with what you will pay to purchase a home warranty, you’ll quickly see how much money you can save.
One important note: Regardless of the company, it will sell more than one type of home warranty. These typically range from essential to premium plans. You want to pay close attention to the details of the one you are most interested in buying.
Say you buy a warranty to have protection should your air conditioning system fail. In your mind, the warranty would cover the entire cost of a new unit. However, the fine print might indicate a monetary cap. For example, while the price of a replacement air conditioner runs about anywhere from $3,600 to $7,500, the warranty may only pay $2,000 of that.
Although you might spend a little more each month for a premium home warranty as opposed to a basic plan, it might be worth it, depending on the type and condition of the appliances and systems in your home.
Money is not the only thing you can save when you renew your home warranty. You can also spare yourself a lot of time, stress, and energy. When items in your home break down, you can avoid the hassle of looking into the problem yourself and let a professional take care of it. If you are not mechanically inclined, a home warranty can be especially appealing.
When something breaks down, you contact the warranty company. In response, the company will get the contract service team to come to your home to assess the problem.
A certified, licensed professional will diagnose the issue and make the necessary repairs or replacements. You can spend your time on other duties while the service team handles all the work.
Frequently Ask Questions (FAQ)
Is it worth it to extend home warranty?
It makes sense because home repairs and construction cost a lot to fix, and nobody expects everything to go perfect for the duration of their time living in a house. Plus, there’s usually an exit clause in the contract so you can opt out if circumstances change before your contract is up.
I guess it could depend on where you live and what kind of contractor rates are like over there – but that’s pretty much the only variable I can think of that might affect whether or not extending a home warranty is worth it.
How long does warranty last on a house?
Most warranties last one year, but it can vary depending on who you buy the warranty from. For example, the home insurer offers an extended warranty that lasts three years.
What does a home warranty cover when you buy a house?
The typical home warranty covers repairs and replacements for faulty and/or broken appliances in your kitchen, living room, bedrooms, bathrooms, basement and garage.
You may also opt to include things like flooring or roofing in your coverage. This can be a great value if you’re not an experienced homeowner who knows exactly what to look for when inspecting the house before making an offer.
Many people never use their warranties or they forget about them until they’ve been turned down by so many repair shops that it’s too late. That said, there’s no such thing as frivolous spending when it comes to protecting your financial investment in a new home!
Think of it this way: you’re paying upfront and counting on premium protection just like insurance
Renewing your home warranty can keep more of your hard-earned money in your pocket. It can reduce stress and anxiety, as you will not have to worry about spending hundreds or thousands of dollars on fixing critical items in your home or installing new ones. With this peace of mind, it is easy to see why having a home warranty is a good decision.