Buying The Right Home Warranty Plan

Buying a house is a big financial decision, and the right home warranty can help you protect some of the most important contents of your new home. A home warranty helps cover repairs to key systems and provides peace of mind once you move into your new home. But how do you choose the right home warranty, and what benefits can you expect? Ahead, we'll cover the critical details of choosing the right home warranty when buying a house.

One of the most common questions about home warranties is, "doesn't my homeowner's insurance cover this stuff?" The truth is that your home warranty and your home insurance serve two different purposes, with homeowners insurance covering major perils like fire, wind damage, and flooding. However, if your furnace, central air-conditioning, or appliances break down on their own, those items won't be covered by homeowner's insurance.

That's where a home warranty comes in because home warranties cover key home systems and appliances. Since repairs to appliances and HVAC systems can be quite expensive, many homeowners prefer the security of a home warranty. Choosing the right home warranty starts with understanding your goals, and how to accomplish them.

• The Cost of Home Warranties
  A solid home warranty typically costs in the range of a few hundred dollars each year, either in a lump sum or through scheduled payments. While the premiums aren't too high, some home warranties have more added costs than others. Just as you would with insurance, be sure to check exactly what's covered, how the claims process works, and whether you will have to pay service fees to have contractors come to examine problems in the home. There are a ton of home warranty options, so shop around to find a plan that fits your needs.
  
  
• What Is Covered By Home Warranties
  In simple terms, a home warranty should cover a lot of the stuff that isn't covered by a standard home insurance policy. Heating, ventilation and air-conditioning systems are a major investment for most homeowners and are typically covered under home warranties. A good home warranty should also cover valuable appliances within the home, so you don't have to worry about shelling out big bucks to repair those fancy new kitchen appliances.
  
  
• When to Buy a Home Warranty
  Purchasing a home warranty isn't a requirement when buying a house, so the decision depends on the financial goals of the home-buyer. If you haven't had the time to properly assess the state of a home's appliances, then it may make sense to purchase a home warranty to hedge against bad luck. Since appliance repairs can be quite costly, a warranty may also make sense for anyone who has invested most of their savings in buying a house. Finally, some homeowners simply like the peace of mind provided by a warranty and find the expense to be worth it.

While a home warranty isn't a necessity, it can be a very nice perk when you need peace of mind or when you're working to get your budget back in order after the big financial move of buying a house. If you have questions about whether a home warranty is the right fit for you, your real estate agent is a great person to speak with to learn more. Remember that just as with home insurance, it pays to shop around before making your home warranty choice.

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