Home Warranty or Extended Warranty: Important Things You Need to Know – Guest Blog Writer

Home Warranty or Extended Warranty: Important Things You Need to Know

If you have multiple expensive appliances at home, it’s only natural to avoid paying a large amount of money for their repair. But the risk of even the best tech breaking down is very high, so this might be unavoidable.

One of the possible solutions is to cover these items with a warranty that will either reduce or completely pay for any fixes. All brand-new devices today come with a manufacturer’s warranty and some other legal protections. However, those will run out, usually within 6-24 months, depending on the device.

Extended and home warranties offer you a chance to extend that coverage not only in time but also protect you in cases of breakdowns not caused by the appliance’s defects (this is what a manufacturer warranty is focused on). However, as both these protection options have some severe limitations, some people might not need either of them.

Differences Between a Home Warranty and Extended Warranty

Home and extended warranty plans are similar in principle. Both of them offer coverage for appliances in case of a breakdown. However, an extended warranty acts as an extension of the manufacturer’s warranty.

This means that it makes that original protection longer and can cover types of breakdowns not included in it initially. Extended warranties can be offered by manufacturer’s retailers or independent service providers.

But you need to understand that due to the nature of this policy, it only covers a single item. This means that to protect all appliances in your home, you will need to purchase a separate extended warranty plan for each of them.

A home warranty plan, on the other hand, is comprehensive. It can not only cover a wide range of appliances, from fridges to AC units and heaters, but also important home systems, like plumbing, ventilation, etc.

These plans vary greatly, so it should be possible to find or create one that will be a perfect fit for your home. The latter is possible because many providers offer optional coverage for a variety of items so homeowners can customize the protections for their property. However, looking at cost breakdown, you will see that adding optional items to the plan can change its price significantly. Therefore, you need to make sure that you really need all of them covered.

It might be tempting to protect every appliance and system within your home. But is it really necessary?

Home Warranty Vs. Extended Warranty: Do You Need Either?

First of all, you need to decide whether a home warranty or an extended warranty plan will suit you best. In this contest, home warranties win by a large margin. Extended plans are highly inefficient and purchasing several of them will result in a total that will, likely, exceed the yearly cost of a premium-grade home warranty plan. You will also get boggled up with paperwork if you need to manage over a dozen plans.

Therefore, a home warranty is a definite favorite for homeowners who want to get some protection in case of unexpected breakdowns of their home systems and appliances. But you should understand that these plans have limitations too. In fact, even the Better Business Bureau warns US residents that while beneficial, home warranties aren’t for everyone.

The main reasons for this are:

● These plans have payout limits, which aren’t that high. This means that they will cover only a fraction of expensive repairs and might not cover replacements at all.

● Home warranty premiums can get too high, depending on the type and condition of the systems and appliances you want to cover with the plan.

● You might feel like you are wasting your money when none of the breakdown of the covered items.

● Some home warranty companies cannot be trusted and they won’t honor the contract, thus leaving you to pay for repairs out of pocket. This means you will waste even more money.

To avoid wasting your money, you should study home warranty plans very carefully and only buy the one that has reasonable coverage maximum limits. The company you purchase this protection from also needs to be trustworthy, so you should study many professional and independent reviews.

But even a good plan from a reliable provider won’t be much good if your home isn’t a suitable fit for a home warranty. People who definitely cannot benefit from it are those living in older houses and using appliances that aren’t in top shape. In this case, not only will your premiums get high, but you will also need to accept that some necessary repairs, induced by wear and tear, might not be covered by the plan.

This plan makes much more sense if your property and appliances are new and repairing them will be expensive. However, as durability is one of the priorities for modern tech manufacturers, you might never need to use that home warranty coverage. Therefore, you’ll be paying that annual fee for nothing.

Now, think about your personal situation, is this expense worth reducing the risk of paying for a big repair? If you believe so, consider buying a home warranty plan. But if you aren’t sure, hold off to do more research on the subject.

Author’s bio: I’m Agatha, owner of agsinger.com blog and a mother of two. I’m also one of those people who love their homes dearly. I always stay open to new ideas and expertise to make my writings handy and captivating for you.

Boston Real Estate for Sale

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Home Warranty or Extended Warranty: Important Things You Need to Know – Guest Blog Writer

What is a home warranty?

INTRODUCTION TO HOME WARRANTIES

A home warranty is essentially a service contract that covers the repair or replacement of critical home systems and appliances that break down over time. It’s a way to shield yourself from unexpected, costly repairs. Many people mistakenly think a home warranty is the same as homeowners insurance, but they serve different purposes. While insurance protects against potential hazards like fires or theft, a home warranty deals with the inevitable wear and tear of home components.

HOW HOME WARRANTIES WORK

Home warranties typically cover major systems such as heating, air conditioning, plumbing, and electrical systems. They also cover household appliances like refrigerators, ovens, and washers. When something covered under the warranty fails, the homeowner contacts the warranty company, which then sends a qualified technician to diagnose and fix the problem. There’s usually a nominal service fee for each claim, but the significant cost of repair or replacement is borne by the warranty company.

TYPES OF HOME WARRANTIES

There are two main types of home warranties: basic and comprehensive. Basic home warranties cover essential home systems and appliances. Comprehensive home warranties, on the other hand, offer more extensive coverage, including additional items like pools, spas, and even roof leaks. Choosing between the two depends on your specific needs and the complexity of your home’s infrastructure.

BENEFITS OF HAVING A HOME WARRANTY

One of the most appealing benefits of a home warranty is financial security. When a major appliance or system breaks down, the repair costs can be overwhelming. A home warranty mitigates this financial risk. Additionally, having a home warranty provides peace of mind. Knowing that you’re covered for unexpected repairs allows you to focus on other aspects of life without worrying about potential home system failures.

LIMITATIONS AND EXCLUSIONS

However, home warranties are not all-encompassing. They often come with limitations and exclusions. For example, pre-existing conditions or improper maintenance might void the coverage. It’s crucial to read the fine print to understand what is and isn’t covered. This helps in setting realistic expectations and avoiding unpleasant surprises when filing a claim.

CHOOSING THE RIGHT HOME WARRANTY

Selecting the right home warranty requires a thorough assessment of your home’s needs. Consider the age and condition of your appliances and systems. Compare different providers, read reviews, and check their coverage options and customer service reputation. It’s also wise to evaluate the terms and conditions to ensure the plan fits your specific requirements.

COSTS INVOLVED WITH HOME WARRANTIES

Home warranties typically involve two types of costs: the upfront cost of purchasing the warranty and service fees for each claim made. The upfront cost can range from a few hundred to several thousand dollars per year, depending on the level of coverage. Service fees are usually much lower and are paid each time a technician visits your home to address a covered issue.

REAL-LIFE SCENARIOS

Real-life scenarios highlight the practical benefits of home warranties. For instance, consider a homeowner whose HVAC system fails in the middle of summer. Without a home warranty, the repair might cost thousands of dollars. With a warranty, they only pay a small service fee, and the rest is covered. Testimonials from other homeowners can also provide insight into the value and peace of mind that a home warranty can offer.

In conclusion, a home warranty is a valuable tool for homeowners looking to protect themselves from unexpected repair costs. By understanding how they work, the benefits they offer, and their limitations, you can make an informed decision about whether a home warranty is right for you.

Peace be with you

Byline – John Ford Boston Beacon Hill Condo Broker 137 Charles St. Boston, MA 02114

Updated: Boston Real Estate Blog 2024