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When you finally decide to purchase a house, a home of your own, you are ready to invest a lot of money. You are not only investing money but your time, effort and turmoil to find a home. Your home is one of your greatest assets and should be protected too. Whether you are a first time buyer or already living in dream house, home warranty is necessary as it provides you with an added layer of security that might save you money in the long run.

First and foremost, you should understand what actually a “Home warranty” is?

A Home warranty

A home warranty plan is a home protection or home owner’s warranty plan in which home owner enters a contract with the home warranty provider. In this plan, home owner gets facilities for a specific price if certain home appliances or systems break or are in need of maintenance. A home warranty plan may be purchased when a house is bought or sold or by a home owner who is currently residing in their home.

The whole home warranty plan covers the maintenance, repair and replacement of appliances as well as heating, cooling, plumbing and electrical systems. Here, it is important to know the difference between home insurance and home warranty.

Home insurance covers your home and belongings from accidental damage due to unexpected theft, storms, fires and natural disasters. A home warranty, on the other hand, covers system components and appliances that fail from age and standard wear and tear.

A home warranty is actually a contract between the owner of the home and a home warranty company that provides for discounted repair and replacement service on major home appliances and systems. The companies already have agreements with specific service providers. If the provider sent by the company determines that the needed replacement or repair is covered by warranty, he will complete the work. The home owner only has to pay a small additional amount for the service.

A Home warranty cost

The next step in the article is to know about the cost of home warranty. A home warranty may cost a few hundred dollars a year. You can pay at the moment or choose to pay in installments if the company agrees. The cost depends on the type of the property and the homeowner choice of purchasing a basic or an extended plan. A basic coverage can start from $300 and go up to $600 or more. Also, some home warranties charge for a service call while others allow unlimited service calls.

The cost of home warranty does not usually vary with the property’s age. If the home is brand new, the cost will automatically increase. The home’s square foot area is also not necessary in determining prices unless it is more than 5,000 square feet. It does not include separate structures in the house such as guest houses but can be covered with an additional fee. If a service needs more than one type of contractor (for example, a plumber and an electrician), the homeowner will pay separately to both the contractors.

One more thing to remember is that having a home warranty does not mean that you will not be paying any money for the services of home repair. Home warranties do not cover for the components that are not maintained by you or by the previous house makers. Also, if the company denies the claim, the homeowner will still pay for the service and also will be responsible for repair costs.

Advantages and disadvantages of getting a home warranty


The subject of home warranty comes often on the sale or purchase of a house. It reassures the home buyer about the maintenance of home components. It is also helpful for people who have just bought their new home with all the savings and do not want to spend any further. It also helps people who do not want to tackle problems of finding a contractor every time the house system needs a repair. Warranties also make sense for people who are fond of buying expensive appliances.


If home warranties were so perfect, why doesn’t everyone have one?

Here is the trick. It has many disadvantages as well. One major disadvantage of home warranty is that it does not cover those appliances or systems which are not well-maintained. If it’s your bad luck, many companies can use the improper maintenance clause as an excuse to deny your valid claims. Sometimes, homeowner and the company have a clash on this clause. Also, when a home owner purchases an old used home, it may have items that were not properly maintained by the previous owner. In this case, the negligence can’t be taken care of.

Home warranties aren’t expensive as compared to the cost of replacing or repairing of any home component. This becomes the major selling point of warranties. Although it eliminates the trouble to find a contractor, but if you do not like the work of a contractor sent by the company, then you are stuck. Also, homeowner cannot say anything if he does not like the replaced component or appliance.

Use a reputable home warranty service

When you need a home warranty, always look up for the reviews online and talk to their previous customers to get an idea. Find out if the customers are happy? Does company have a quick turnaround time? Does it offer online support? How easy it is to get something fixed quickly?

It is also reasonable to know beforehand how they resolve a dispute about a home warranty claim. Find   the company’s policy in such matters and also their dispute resolution process.

A home warranty may or may not prove to be a perfect solution. Before buying one, read the detail in the given file of contract and carefully consider whether it is worth of your money. The homeowner or the seller or buyer should do a thorough research in finding a reputable company that will be there for paying when you need it.