Buying a home in today’s market has a lot of risk that comes with it. Sellers have to compete against a lot of other people selling their homes. They have to go to considerable lengths in order to attract potential buyers of their property. One way that sellers are attracting people to their doors is by offering a home warranty. A home warranty is one way for sellers to attract buyers and for buyers to feel happy about their purchase.
The Benefits and Drawbacks of a Home Warranty
Home Warranty Defined
A home warranty is an agreement between the warranty company and the homeowner that gives the homeowner the peace of mind that if something in the home breaks or needs repair, then they can get the repairs they need to fix the issue. In return the homeowner pays a premium for the protection of the warranty product.
Benefits of a Home Warranty
Some of the key benefits of the warranty include:
- Coverage for most of the major appliances such as the refrigerator, washer and dryer and even swimming pools.
- Benefits for homes equipped with approved heating and cooling systems.
- Repair services for any malfunctions of covered devices.
- Flexible payment plans for new contracts and home sellers.
How It Works
There are different levels of coverage that homeowners can purchase. Once a contract has been purchased the homeowner is sent a policy for them to review. If there is a claim to be made, the owner calls the warranty company and asks a repair service person to come and assist. The repair person comes and and reviews the problem and submits a plan of action to the warranty company. Once the plan of action is accepted the repairs can begin. If the repair cannot be made, then in some cases the whole unit is replaced.
Some drawbacks of the home warranty are:
- Items in the home that are not taken care of may not be covered or may lose coverage altogether.
- The warranties can come with limits on how much it will pay out.
- The contract may also have a number of exclusions that can limit what actually can be repaired by the company.
- For the amount of money that a homeowner spends on the premium they could put the money in a service fund of their own and just pay for the repairs since some things may not break down at all.
- The owner may not be able to choose their own repair person when it comes time to fix the issue.