5 Things To know About Home Warranties
During the home buying process there are several costs incurred during or immediately after the purchase that are not directly associated to the closing costs. One such cost is a home warranty. Oftentimes sellers may include a home warranty in the final purchase agreement, but if not, it is a purchase decision made after the sale by the new homeowners. Home warranties are annual agreements providing coverage for instances such as broken appliances which are not covered under home insurance. Consult our quick guide below to learn more about the top five common questions pertaining to home warranties.
1. Why Are Home Warranties Important?
Yes. Home Warranties, although not used in every household, have the ability to save an incredible amount of money. Since home insurance does not cover everything in the home, a warranty is your chance to protect parts of your new home such as appliances, roofing and other systems. Simply because an appliance or system is new does not mean it will function flawlessly.
2. What are the average costs or hidden fees of home warranties?
On average, an annual fee for home warranties will range anywhere from $250 to $600 depending on the size of the home and number of inclusions. More specifically, home warranty prices in Colorado for example, range from $230 to $500. One such situation is If a $2,000 HVAC system breaks and the annual cost was at the maximum of $500 the home warranty automatically proves its worth with a savings of over a thousand dollars. Make sure to read the home warranty agreement carefully since not everything will be included. For example if you have a pool, this may have the option of inclusion, but it also may increase your premium. Keep in mind too that warranty companies will not provide coverage for things not properly maintained.
3. Do you need an inspection?
In general, home warranty companies do not inspect the home prior to providing a warranty. However, make sure to read the agreement carefully because the warranties almost never cover preexisting conditions.
4. How do you choose a home warranty company?
During the search for a home warranty make sure to choose a provider with years of service in your state. This is of particular importance if your state does not regulate home warranty companies. A good way to check the legitimacy of a home warranty company is to check its Better Business Bureau rating.
5. What are the deductibles?
After an issue arises with a system or appliance the home warranty will require a deductible if a repairmen needs to pay a visit. These deductibles can range anywhere from $50 to $100. However, the initial call to the warranty company may help to answer questions about the issue at hand, avoiding a home visit all together.
Not everyone buys a home warranty, because in the end, it is up to your discretion about whether or not you need it. However, it is never a bad idea to consider insurance for appliances and systems vital to the function of your home.