A home warranty is, in it’s most basic sense, an extended warranty for your home. Why would you want that?
There are a few good reasons. When you purchase a home, it’s not uncommon to use almost all or your financial resources to purchase the home. Many buyers are not left with money should an expensive repair become necessary. The way it works is you purchase the warranty, usually $400 – $500 per year, and it’s renewable. Should a covered item need repair or replacement, you call the warranty company. They dispatch a technician. You’ll pay a small co-pay ( usually under $100) and the warranty company will either repair or replace, at their discretion.
Let’s say for example that two days after closing on your home, the air conditioner dies. We’ve seen it happen more than once. You can’t go back to the seller, so what to do? In one instance, the new owner’s air conditioner died after two days. She called the warranty company, paid the copay and within 48 hours had a brand new air conditioner.
You can purchase the warranty with a variety of coverage, but most people purchase the full package. This covers all appliances, heat and air conditioning systems, hot water heating, electrical and plumbing systems.
Many think it’s worthwhile to purchase the insurance policy rather than possibly face a large repair bill.
Another option is to purchase a service contract just for the heat and air conditioning system. If all (or most) appliances are newer and under manufacturers warranty, this may be a good call.
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