Home warranty plans are also known as home protection plans. Their purpose is to protect you and your home from unexpected expenses when systems or appliances suddenly go on the fritz. In the beginning, when everything is new, these things are typically covered by manufacturer warranties. Eventually, those warranties expire—that’s when a home warranty plan becomes essential.
The Most Important Items to Include
Owning a home means having lots of unexpected expenses, from replacing furniture to dealing with a broken pipe the first night you move in. When things go wrong, like the air conditioner dying when it’s over a hundred degrees out, you’re stuck repairing or replacing it. The cost to do either can reach several thousand dollars, and most people don’t have that kind of cash just lying around. That’s where a home warranty plan comes in handy.
It’s important to understand that a home warranty plan is not the same as home insurance. Homeowners insurance protects you from catastrophes like flooding, fire, or storms. The best home warranty plan will protect you from the breakdown of your appliances and home systems.
When you think about these differences in home warranties, it becomes difficult to break them down into the most critical items. It boils down to what do you need to survive compared to what you need to live comfortably.
If it gets sweltering, then having an air conditioner is going to be a top priority. Refrigerators are universally crucial because they store your food at safe temperatures. Plumbing systems are also critical because if something goes wrong there, you could be looking at a break underground or possibly in your foundation.
System plans focus on whole-house systems. To help you understand what you’ll see in a home warranty plan like this, think about what runs through your home. Your air conditioning keeps your entire family cool, so while the central unit is outside, it is considered a whole-home system.
Other systems include plumbing and electrical. Plumbing and electrical both run throughout your home. Pipes go from every bathroom and kitchen faucet to the water main outside. Electrical makes it possible for you to flip a switch and not trigger your GFI plug.
When a pipe breaks or gets clogged, it can cause damage in different areas. Faulty electrical is a fire hazard. Having a system plan can keep problems like these more manageable when unexpected incidents happen.
Appliance plans are different in that they cover major appliances like your dishwasher, oven, built-in microwave, refrigerator, washer and dryer, and possibly garage doors. Every single one of these appliances comes with a manufacturer warranty. That’s great if they break while they’re covered, but when they’re not, replacing a washer and dryer can easily set you back a few thousand dollars.
When the oven dies at Thanksgiving, you’re going to be grateful that you have a home warranty plan so you can get it fixed and keep going with your turkey dinner. If the dishwasher stops doing its job, you can make a quick phone call and get someone out to you quickly.
Combination plans are generally a combo between system and appliance plans. In some cases, you can also get extra options for additional items that you have. Some companies will also let you customize your combination to fit your needs.
Examples of additional items include pools, spas, hot tubs, upright or chest freezers, and a second fridge. Plenty of households have a second refrigerator, and if that second fridge stops working, you might as well say goodbye to everything inside. A home warranty plan can cover repair or replacement for any of these additional items if you decide that’s what you need.
A Few Final Thoughts
The average home warranty can cost anywhere from a few hundred dollars to a few thousand dollars, depending on your chosen coverage. Basic plans are on the lower end and may only be used for the specific items you’re most worried about. Comprehensive plans are the ones that cover all the items.
Monthly premiums can be affordable, and compared to paying for costs out of pocket, they are more attractive to your pocketbook, too. You’ll have to decide what is most important to you regarding appliances and systems to get the best warranty for your needs. Maybe you’re primarily concerned with electrical or air conditioning systems. Perhaps, you’re more worried about your appliances because you’re not sure how long they’ll last. The most effective home warranty plan is going to be the one that fits what your home needs, so take some time to figure out what you need to make sure you make the right decision.