We are often advised to get a health or life insurance in case something unexpected happens. For one thing, getting insurance can save hundreds or even thousands of dollars on hospital bills and medications. You can also get insurance for your car to avoid draining your expenses in case road accidents happen.
This also applies when you are buying a house. Upon purchase of a home, it is likely that you will be advised by real estate agents in London and South West to avail a home warranty. How does a home warranty work? Is it the same as home insurance? Lastly, do you really need to avail one?
Home warranty vs. home insurance
The two may seem the same but are actually two things. On the one hand, home warranty refers to a contract entered between a home warranty provider and the homeowner. A home warranty usually covers one or more home components, but extra components can be added at an additional cost as well.
The said contract usually covers replacement and repair services in a home, including HVAC, electrical, and plumbing systems. In some instances, a home warranty can also cover the repair and replacement of appliances, including refrigerators, dishwashers, and washing machines.
On the other hand, a homeowner’s insurance covers the expense of any damage due to unexpected circumstances. This includes weather disturbances, natural disasters, property crimes, and others that can cause damage to the structure and the homeowner’s personal properties.
Know more about a home warranty
Usually, a home warranty may cost a couple of hundreds of dollars annually, and it can be paid upfront or via installment. A home warranty plan may also depend on the type of property you have — whether it’s a condo, duplex, townhouse, or detached house. It usually covers specific repair and replacement services in your home, but extra components can be added for an extra charge.
It is important to note that having a home warranty means you won’t spend on any repairs needed in your home. There are some instances that may not be covered by the home warranty. That is why you should consider carefully what to include in the warranty coverage and understand the contract further.
Like any other things, a home warranty also has its set of pros and cons. On the one hand, availing a home warranty can offer peace of mind for homeowners. It will also lessen the stress of thinking about expensive repair and replacement costs. It can also help a lot, especially for first-time homeowners who are not familiar with appliance breakdowns.
On the other hand, a home warranty usually does not cover everything, including natural disasters and property damage. At most times, it won’t cover the repair and replacement of appliances that were not maintained properly. You are also required to pay for annual premiums even if you end up not using it.
These are only some things you need to consider if you are planning to get a home warranty. On the contrary, it is not a bad thing to get one just to secure your finances and your home from unexpected circumstances.