Owning a home is expensive, and it’s not just the mortgage that can put a strain on your finances. As a homeowner, you’re responsible for keeping your home in good repair. When something breaks down, there’s no landlord to call for repairs. You have to handle finding someone, scheduling the repair, and paying for it out of your own pocket.
And your homeowners insurance won’t cover many — even most — of the things that could break down in your home. Homeowners insurance policies are designed to cover catastrophic damage to your home’s structure, not wear-and-tear breakdowns of home systems and appliances. And while you might never need to file a home insurance claim, you’ll need to pay for home maintenance yearly, if not multiple times a year. Here’s how having a home warranty can help.
Experts recommend budgeting at least one to four percent of your home’s value for maintenance every year. That’s a lot of money, even if you live in a relatively low-cost-of-living area where home values are still more affordable than they are in many parts of the country. If you own a $300,000 or $400,000 home, though, you could be looking at putting aside up to $16,000 a year just for maintenance.
But the thing is, you might not spend that much every year — and there might well be years where you’re not doing as well financially and can’t afford to budget as much for home repairs. You never know when a large appliance or home system is going to break down, so it’s hard to plan for that in your budget. And, unless you’ve bought a new home with new appliances, there’s the risk that something will break down in the first year of your ownership, before you’ve even had time to save for repairs.
With a home warranty, you can more easily fit the costs of home maintenance into your budget. You’ll have set monthly plan costs, trade service call fees, and deductibles, so you’ll be able to both budget for those costs monthly and anticipate how much you can expect to pay for repairs. In many cases, you can get a home system or appliance repaired or replaced under your home warranty for free, after you pay the trade service call fee.
It’s never easy to find a service professional on your own. Most of the best contractors are kept busy through word-of-mouth referrals, so even finding someone with availability to come out and diagnose your problem can be an issue. Depending on what’s wrong, you might not want to take the time to vet multiple service professionals, research their licensing and qualifications, check references, and get quotes.
When you buy a home warranty, you’ll have access to a nationwide network of service professionals who have already been background checked for honesty, reliability, and skill. Your home warranty company will take care of all the reference-checking, license verification, and so forth. All you’ll have to do is call up and request service, and your home warranty company will send out a local contractor with whom they have a relationship.
Easy access to local service professionals is just the baseline of what most home warranty companies offer their members these days. You can also get access to great perks, like discounts on new appliances; free delivery, installation, and haul-away when you buy a new appliance from your home warranty provider; discounts on furnace filters and other home maintenance needs; and even discounts on HVAC tuneups, gutter cleanings, and other essential services.
For most homeowners, the biggest benefit of a home warranty is the peace of mind they enjoy knowing that if something breaks down, they’re covered. A good home warranty company has a track record of covering repairs and replacements due to normal wear and tear, even without detailed maintenance records for the appliance or home system in question. Do your research and make sure you know what you’re getting with your new home warranty coverage, because usually when a homeowner is dissatisfied with a home warranty, it’s because he or she had unrealistic expectations of what was covered.
A home repair or replacement can easily cost multiple thousands of dollars, but when you have a home warranty, they’ll cover at least some, if not all, of the costs. Most home warranties will cover less expensive repairs and replacements, like those to major appliances, entirely after your trade service call fee. Of course, there are limits to how much a plan will pay out, but even if the cost of your repair exceeds that payout limit, you’re still going to save a huge amount of money over what you’d have had to pay if you’d covered it all on your own. With the money you save, you could pay for upgrades and improvements, save for college or retirement, or take a nice vacation to celebrate your new HVAC installation.
There are plenty of reasons why a home warranty is a good buy for every homeowner. Enjoy the confidence of knowing you’re covered in the case of a breakdown, so you can spend your time worrying about what to make for dinner, rather than how to get your stove up and running again.