Benefits Of Having A Home Warranty And How It Is Different From Home Insurance

By Daniel Pizzi REMAX Gateway

After you invest in a property of your choice, it becomes your responsibility to take care of it and keep it in excellent condition. It is quite common after your purchase, to get offers on home warranty.

For example, you will receive tons of emails from various companies regarding the same. As a buyer, is it essential to get a home warranty, and how will it benefit you? Is it a safety net that you need to have, or will you be okay if you don’t have one on your property?

There are a lot of questions on your mind, especially when it comes to this topic. It is understandable why you are apprehensive about this type of coverage. After all, you don’t want to spend a portion of your money, only to find out that it doesn’t come with any advantages.

Fortunately, a home warranty is a wonderful form of financial protection you should consider having on your property.

Home warranty – What is it?

Before going into the specifics of this type of coverage, you should understand the meaning of home warranty. It refers to a contract between you and the service provider, which will give you a discount on various parts of your household.

For example, if you need to repair the electrical, plumbing, furnace, and air conditioning systems of the property, the cost goes down. Some companies which offer home warranty provide coverage for swimming pools, refrigerators, dryers, and washers.

How does home warranty work?

When something in your household breaks down, and it comes under the home warranty plan, you need to get in touch with the company. They will get in touch with the service provider, who is in charge or maintaining different types of appliances and systems.

The company will send a professional, who will determine whether the replacement or repair comes under coverage. If approved, this individual will resolve the issue as soon as possible. You have to pay a small fee for the service provided by the home warranty company.

What are the benefits of having a home warranty?

Okay, now you have considerable knowledge about a home warranty, along with how it works. The next thing you should be aware of is why you should get one for your property. Below, you will find a list of reasons, which highlight the advantages of this type of coverage:

Different types of protection

One advantage of investing in a home warranty is the various levels of coverage it offers. There are plenty of providers in the market who offer different packages. As a buyer, you are in a position to select one which meets your requirements.

For example, if you don’t have a lot of appliances in your household, it doesn’t make sense to get an extensive plan. Not only will you have to pay more, but it also won’t be of any use, in the long run.

In this situation, you can go for the basic plan, which will cover a majority of the systems in your household, along with a handful of appliances. If you are taking care of a sizable property with a vast number of features, the complete package will be of immense help.

Easy solution for all issues

Without a home warranty, you have to jump through hoops and hurdles to fix any problem you face in your household. An example – you discover there is a leak in the plumbing of your bathroom.

Now, you have to look for plumbers who have the expertise to handle this type of work. You go online and search directories to find the right professional. As a responsible homeowner, you have to do background research, to know this individual is trustworthy.

You need to get in touch with the professional, schedule an appointment, and get him/her to take a look at the problem. By the time you reach the plumber to fix the issue, it takes a considerable portion of your time.

With a home warranty, you don’t have to go out of your way to resolve the problem. Get in touch with the provider and hand them the necessary details. They will take over and make it a point to fix the problem immediately.

Flat rate to fix problems

Regardless of how well you maintain your household, there will be a time when you face issues. Even if you get the best home inspector money can buy, this professional may miss a handful of things. As a result, you have to spend a vast sum of money to fix these issues.

Unless you have an emergency fund, this is going to cause a significant strain on your finances. You may have to go into debt, an unnecessary and avoidable situation. It isn’t a joke for your credit rating to take a hit, because you needed to make emergency house repairs.

When you sign up for home warranty, the provider will only ask you to pay a specific amount as per the contract. It is a small number compared to how much you have to spend, to fix the issue by yourself.

What is the difference between a home warranty and home insurance?

As both these terms refer to coverage, it is common for owners to think they are the same. However, the reality is that there are differences between the two.

A home warranty and insurance cover different areas of unexpected damage. For starters, if a storm, fire, or water affects your property, insurance will provide the necessary coverage. As per the contract with the provider, you will receive compensation for any damage due to a fire, water,  or storm.

It also comes into play when there is a theft in your household. If you have the right home insurance, the provider will pay for the loss of your belongings due to this type of crime. In other words, you can think of home insurance as a way to protect your property and your belongings from unexpected situations.

On the other hand, home warranties have more to do with the appliances and systems in your household. For example, your air conditioner needs repair, due to wear and tear over time. With a home warranty, the provider will make resolve the problems in your air conditioner for a small cost.

Also, most of the places don’t require you to have this type of coverage when you purchase a property. However, it is mandatory for owners to have home insurance, especially if you have a mortgage on the establishment.

Is it necessary to have a home warranty?

You may assume that it is okay not to have coverage because it helps you save hundreds of dollars in premium. In the short run, this feels like a great idea as you can use the additional funds in other aspects of your life.

But think about it, what are you going to do when the electrical system in your household is facing a significant issue? Do you think you should spend thousands of dollars to fix this issue?

Keep in mind that you should always think about your property as a long-term investment. A home warranty provides various degrees of coverage as per your requirements. You never have to worry about whether you have enough to pay for the repairs.

Once you have a home warranty, you can take it easy, because you know help is only a call away. If you are looking for the best coverage for your property, then you should get both home warranty and home insurance.

For instance, a wiring problem might necessitate specific repairs. However, because there isn’t any damage, home insurance won’t cover for the cost to fix this issue. On the other hand, a home warranty will be useful, because you can resolve this issue for a small fee.

They will protect your property against all types of damages. Whether it is your appliances or belongings, you never have to worry about them.