Home warranties are often misunderstood by homeowners and home buyers, leading to many myths and misconceptions about their coverage and benefits. This article will address some of the biggest home warranty myths and provide a more accurate understanding of what a home warranty can and cannot do for homeowners. By dispelling these myths, homeowners and homebuyers can make more informed decisions about whether a home warranty is right for them.
- 1 What Is A Home Warranty Exactly?
- 2 The Biggest Home Warranty Myths
- 3 Myth #1: Home Warranties Cover All Home Repairs And Appliances
- 4 Myth #2: Home Warranties Are Expensive
- 5 Myth #3: Home Warranties Are A Waste Of Money
- 6 Myth #4: Home Warranties Only Benefit The Seller
- 7 Myth #5: Home Warranty Companies Are Difficult To Work With
- 8 Did You Know About These Common Home Warranty Myths?
What Is A Home Warranty Exactly?
If you’re a homeowner, you may have heard the term “home warranty” before. But what exactly does it mean? Essentially, a home warranty is a contract between the homeowner and a warranty company that covers the cost of repairs or replacements for certain items in the home that may break down or malfunction. Commonly covered items include appliances, heating and cooling systems, and plumbing.
It’s important to note that a home warranty differs from homeowner’s insurance, which typically covers damage caused by natural disasters or theft. While a home warranty can provide peace of mind and save you money on unexpected repairs, it’s important to carefully read the terms and conditions of the contract to fully understand what is covered and what is not.
The Biggest Home Warranty Myths
It’s no secret that there are a lot of myths and misunderstandings about home warranties. Here are some of the most common ones:
Myth #1: Home Warranties Cover All Home Repairs And Appliances
Reality: Home warranties typically only cover certain appliances and systems, such as heating, ventilation, and air conditioning (HVAC) systems, plumbing, and electrical systems. Some policies may also cover major appliances like refrigerators and dishwashers, but not all repairs or replacements will be covered.
It’s important to carefully read the terms and conditions of a home warranty policy to understand what is covered and what is not. Some policies may have exclusions or limitations on coverage, such as only covering repairs or replacements up to a certain amount or not covering pre-existing conditions.
Additionally, home warranties typically do not cover repairs or replacements due to homeowner negligence or misuse of the covered item. For example, if a homeowner fails to maintain their HVAC system and it breaks down, the home warranty may not cover the repair or replacement.
Myth #2: Home Warranties Are Expensive
Reality: Home warranties can be affordable, especially compared to repairing or replacing a major system or appliance. The cost of a home warranty policy depends on the level of coverage and the deductible and can vary from company to company.
In general, the cost of a home warranty policy ranges from $350 to $600 per year. The savings from covered repairs or replacements can offset this cost. For example, if a covered repair costs $500 and the deductible is $75, the homeowner would only pay $75, and the home warranty company would cover the remaining $425.
It’s important to compare the cost of a home warranty policy to the cost of repairing or replacing a major system or appliance without coverage. Homeowners should also consider the age and condition of their home and its systems and appliances when deciding whether to purchase a home warranty.
Myth #3: Home Warranties Are A Waste Of Money
Reality: A home warranty can provide peace of mind and save homeowners money on unexpected repairs or replacements. In addition, many home buyers are attracted to homes with warranties, as it gives them added confidence in the purchase.
Home warranties can be especially beneficial for homes with older systems and appliances. As these items age, they are more likely to break down and require repairs or replacements. A home warranty can help homeowners manage the costs of these unexpected repairs or replacements.
Home warranties can also be a valuable selling point for homeowners. When selling a home, offering a home warranty can make the home more attractive to potential buyers and provide coverage during the listing period. This can give buyers added confidence in the purchase and make them more likely to make an offer.
Myth #4: Home Warranties Only Benefit The Seller
Reality: Home warranties can benefit buyers and sellers in real estate transactions. For the seller, it can make the home more attractive to potential buyers and provide coverage during the listing period. For the buyer, it can protect against unexpected repairs and replacements.
When selling a home, offering a home warranty can make the home more attractive to potential buyers. It can give buyers added confidence in the purchase and provide peace of mind during the listing period. Additionally, the home warranty can cover the cost of a covered repair or replacement needed during the listing period, rather than the seller paying out of pocket.
A home warranty can protect the buyer against unexpected repairs and replacements. This can be especially beneficial for first-time home buyers who may not have the financial resources to cover unexpected repair or replacement costs. A home warranty can provide peace of mind during the first few years of homeownership when unexpected expenses can be a major burden.
Home warranties can also benefit buyers and sellers by preventing post-sale disputes. If a covered item breaks down shortly after the sale, the buyer may blame the seller for not disclosing the issue, even if the seller was unaware of the problem. By providing a home warranty, the seller can show that they took steps to ensure the home was in good condition at the time of sale and provide coverage for any unexpected issues.
Myth #5: Home Warranty Companies Are Difficult To Work With
Reality: Like any service provider, some home warranty companies may have better customer service than others. Researching different companies and reading reviews before choosing a policy is important. Additionally, some home warranty companies have online portals that make it easy to file a claim and track the progress of repairs.
When choosing a home warranty company, it’s important to consider factors such as coverage options, cost, deductibles, and customer service. Homeowners should read reviews and check the company’s rating with the Better Business Bureau. It’s also a good idea to ask for recommendations from friends or family members who have previously used home warranty companies.
If a covered item breaks down, homeowners should contact the home warranty company as soon as possible to file a claim. The home warranty company will typically send a contractor to diagnose the issue and determine if it is covered under the policy. If the repair or replacement is covered, the homeowner will only be responsible for paying the deductible.
Homeowners should also be aware of their responsibilities under the home warranty policy. For example, some policies require homeowners to regularly maintain covered items to keep the coverage in force. If a covered item breaks down due to a lack of maintenance, the repair or replacement may not be covered.
Did You Know About These Common Home Warranty Myths?
In conclusion, home warranties can provide peace of mind and save homeowners money on unexpected repairs or replacements. However, it’s important to understand what is and is not covered under a home warranty policy and to choose a reputable home warranty company. By dispelling these home warranty myths, homeowners and homebuyers can make more informed decisions about whether a home warranty is right for them.