What is a home guarantee and do you need it?

Let’s start right away: A home warranty is a renewable home maintenance plan that covers your home systems and appliances, including your water heater and HVAC systems, in the event of a failure. Home insurance typically covers catastrophes, so warranties are meant to help pay for things that break through wear and tear and everyday use.

Living room in newly built luxury house

How does it work?

A home service plan is optional, but it’s often a good idea to buy one, according to Raj Midha, general manager and senior vice president of American Home Shield, a warranty company. This policy typically costs around $50 to $75 per month. This low price can pay off enormously.

According to Midha: “Let’s say your HVAC system has stopped working. In this case, a qualified, independent service provider will be commissioned to assess the problem. If the system is determined to be inoperable due to age or wear and tear, and the failure is covered by the terms of your service contract, the repair professional will make the repair or replace the unit or system component, if necessary, at only the cost of your service call.”

Midha’s company will cover the cost according to the plan you choose. He says, “A one-time service call costs either $75, $100, or $125 based on the amount you select upfront when you become a member, and American Home Shield will pay the remaining amount for repair or replacement on the.” Foundation of the Plan You chose.”

As for what it doesn’t cover, he shared, “Generally, a home warranty doesn’t cover events like fire, smoke, theft, fallen trees, or weather-related damage that are covered by home insurance.”

A home warranty covers home systems

who needs it

When you live in a new home, you may think that you don’t need a home guarantee. However, Midha shares that it’s 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 add-on insurance, but can be an especially wise decision for homeowners on a set budget, owners of older homes or new home buyers who have chosen to capitalize on their inspection risks.” to renounce.”

He continued, “The protection of a home maintenance plan can save you hundreds or even thousands in out-of-pocket expenses, as well as the headache of finding a trusted service provider to perform the repairs.”

Who doesn’t need it?

Of course, that doesn’t mean that absolutely everyone needs a home guarantee. The main thing is that warranties are contingent on whether the homeowner has maintained these items, as warranties do not cover damage due to an owner’s negligence.

Another disadvantage is that if an item has been damaged beyond repair, you may not be able to select the replacement. Of course, as with insurance, you pay the premium regardless of whether you use the service or not.

You might want to consider a home guarantee

How to get it

Although often advertised as a benefit when buying a new home, you can still get a policy at any time. Midha shared, “Once you purchase a plan, you can use your home guarantee after the 30-day waiting period, which is an industry standard.”