Do I Need a Home Warranty?

Maybe you hear the word “warranty” and roll your eyes, thinking of some big box store sales guy trying to upsell you on a microwave. 

But a home warranty is an inexpensive tool that can minimize your financial worries as you take on the responsibility of a new home. You don’t want to close on a mortgage, move in, and discover that the dishwasher is on its last suds. You’ll have to pay for repairs after you just ponied up closing costs. 

Warranties typically cost a few hundred dollars annually – possibly the same price as a single appliance repair, so they’re worth considering. Is a home warranty right for you? Let’s break them down. 

The Difference Between Warranties and Insurance 

A home warranty is a renewable contract that provides repair and replacement services for a home’s major components and appliances. Think HVAC system, plumbing, or that washing machine. While lenders require a homeowners insurance policy, which covers damage to the entire home and your possessions, a home warranty is optional. It fills in coverage where insurance may not apply. 

For example, let’s say you have a pipe burst. If your home warranty covers plumbing, the pipe itself is covered for repair or replacement. However, the warranty would not cover the damage the burst caused — that job goes to your homeowners insurance policy. 

What Does a Home Warranty Cover? 

In addition to major systems like HVAC, a home warranty can cover kitchen appliances, your water heater, and even pool systems. Plans come in a range of sizes, so you can pick what price and systems work for you. You can always expand your plan to include additional items as well. Just be sure to read the fine print and make sure you’re getting the coverage you want. 

Expert Tip

Pay special attention to everything included in the contract; coverage only applies to systems and appliances specifically mentioned. Also, what’s covered varies by location, company, and plan.

Does a Home Warranty Come with my Home Purchase? 

Home warranties are not automatically included in your home’s purchase. Most builders offer warranties if you’re building a new home from the ground up. But if you’re buying an existing home, you’ll need to shop for one yourself. Your lender can help you find reputable companies and add their fee to your closing costs. 

Do I Need a Home Warranty? 

Home warranties aren’t for everyone. Here are some pros and cons to think about: 

• How comprehensive are your manufacturers’ warranties? If all your appliances are new, maybe you leave their care to the Maytag Man.  

• Do you prefer the security of knowing you won’t pay out-of-pocket for big ticket items?  

• Do you have a fund should something break? 

• What did your home inspectionstate? (While also optional, home inspections are highly recommended when you purchase a home. They give you the status of systems, appliances, roofing, and more. They cost just a few hundred dollars.) 

• Do you have a more expensive taste in appliances? Warranties may only allow certain brands to replace them. 

• Is your warranty flexible enough? You may be limited to only certain contractors, dollar limits per repair, and additional fees for frequent service calls. 

• Are you pretty handy yourself? (Hey, it’s not for us, but if you can take on that dishwasher, go for it!) 

To Warranty or Not to Warranty 

Bottom line, no one wants the hassle of hunting down a contractor during a home system failure. A warranty means one call solves it all. But they do have limitations. Read the fine print, and if you have questions, call Atlantic Bay! We’re happy to discuss our partnership with Achosa Home Warranty, or any others you like!