Unless you have experience in home repairs or you are a DIY maniac, it’s obvious you might be considering a home warranty. With a home warranty, you don’t have to budget for replacements or repairs whenever an appliance or a system malfunctions. This is because the burden is usually offset by the warranty provider. Such a warranty comes in handy when you are buying a property that is ready for occupation. This means that the warranty can’t be used in instances where a home was built by the owner from scratch.
However, there is very little that’s known about the cover that’s provided by a home warranty. Below is a list of tp0he things that you should know before buying a warranty plan for your new home.
It’s Different from Home Insurance
If you ask most people, they will tell you that a home warranty is the same as homeowners insurance. As a matter of fact, comparing the two plans is like comparing the equator and North Pole. With a home insurance, you can be compensated by the insurance company if your property is damaged by fire, bad weather or if it’s vandalized by thieves. On the other hand, a home warranty only helps you by repairing or replacing appliances that are damaged within a specified period of time. This means that the plan doesn’t cover for the damages that are included in the home insurance package. To avoid such misunderstandings, it’s recommended that you read between the lines of your home warranty so that you can know what you are getting yourself into.
Advice for First Time Buyers
If you are buying your first ever home, all of the details can seem a little overwhelming. One thing you should be sure of is that getting a new home warranty will be of benefit to you. They are essentially there to give you peace of mind, so that any issues or defects that arise in your home can be put right.
When buying a home through a mortgage plan, the lender usually demands that you first get home insurance cover. This means that the lender can’t provide the funds unless your home is covered. On the other hand, a home warranty is optional. However, majority of homeowners use it to avoid incurring huge costs in the name of repairs after buying a property. With home insurance, you can be sure that if anything stops functioning as initially indicated, it will be repaired or replaced immediately and you will not be asked to pay for anything. However, there are some home warranty companies that ask you to pay a small standing fee every time you report a malfunction. But it’s nothing compared to the amount you would have to spend if you were to cater for all the costs.
There is a Validity Period
Every home warranty comes with a validity period. In most plans, the validity period is one year, which is the same as twelve months. This means that you are only covered for certain damages as long as the validity period of your warranty has not expired. If you make a claim after the lapse of the validity period, the warranty provider will not replace or repair the item that has been damaged. The good thing is that home warranty is designed to be renewable. In fact, you should renew your cover before it expires to spare yourself from the trouble of having to cater for repairs and replacements with your own cash.
It Improves Home Resale Value
When people are looking to invest in an asset, they normally give priority to properties that have home warranty. This is because they are sure that they will not have to spend extra cash after acquiring the property. If you intend to sell your home in future, it’s advisable that you buy a home warranty plan before listing it in the property market. This is due to the fact that buyers hesitate in buying properties that are not covered because they are not sure about the value that they will get after parting with their money.