Are you thinking about buying a home but aren’t sure what you need to keep it protected? Or maybe you already know about homeowners insurance but haven’t looked at a home warranty? Most people think that home warranties are similar to homeowners insurance, but that is not actually the case. A home warranty provides assurances that repairs will not end up costing an exorbitant amount of money. In the case of a home warranty, a policy covers certain times and appliances. This means that the cost to repair certain appliances may be covered with a warranty.
What is a Home Warranty?
If you file a claim via a warranty, a professional repair person will come out, and the homeowner pays a service fee which is similar to a deductible to get the repair completed. In some cases, the owner will pay the full bill and get reimbursed later.
Home Warranty Benefits
Because a home warranty and homeowners insurance are similar, you might wonder if there is any true benefit to having a home warranty. One reason a home warranty is beneficial when it comes to repairs is that flat rate fixes can save you money. In some cases, unexpected repair costs pop up later down the road, with a home warranty can save you money because your policy says you only needed a certain amount of money for repairs and that remains a flat rate.
Another benefit that comes with having a home warranty is that it gives you peace of mind. These policies are also pretty affordable and can be worked into your budget even if you have repairs that come up that need to be handled.
Home Warranty Downsides
Although there are money saving benefits that come with warranties, they do have their downsides as well. One reason people give warranties a second thought is due to the fact they don’t cover events like acts of God so if there is a flood in your home, your warranty will usually not cover the damages. Also home warranty companies typically work with specific repair companies so you won’t have as much freedom as to who is actually repairing your home when needed. They also usually only cover repairs, and not replacements and if you do need something replaced, it can be tons of paperwork to do so.
Do I Need a Home Warranty?
If you have purchased a brand new home, you won’t need a warranty since the policy won’t be necessary. Also, appliances that are brand new are usually protected by their own warranty, so a home warranty would be duplicate coverage. However, if you purchase an older home or older appliances, you might want to look into a home warranty. Since older appliances are more likely to need repairs, a warranty might be the right choice for you.
Reach Out Today
Buying a home comes with lots of questions and some of those might include whether or not you should purchase a warranty. We would be more than happy to assist you in all your home buying needs, so give us a call at North Star Mortgage Network today!