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Covering Your Bases: Is a Home Warranty Right for Your Home?

risk management

A home warranty is a service contract that covers the repair or replacement of certain appliances and systems in a home, such as the HVAC system, plumbing, and electrical systems. The contract is usually purchased by the homeowner and covers items not typically covered by a homeowner’s insurance policy.

The warranty company will send a technician to diagnose, repair, or replace the covered item if it breaks down due to normal wear and tear. The cost of the warranty is typically a yearly fee. If you’ve got a lot of new appliances or a property investor with more than one property, a home warranty can be a cheaper option than paying for repairs and replacement.

Sod’s law also known as murphy’s law may result in a lot of appliances breaking down at some time. The expense may stretch your cash flow beyond what you can afford threatening your other financial commitments like your mortgage repayments.

An affordable annual fee for a home warranty policy is the less stressful option. You will want to ensure it’s an insurance company that provides it so you can trust they will take care of the costs required to keep your appliances in good working order.

Sounds great – so now, only one question remains: is the policy worth it, especially when you have home insurance?

What’s a home warranty for?

First, don’t assume a home warranty will protect you in case of fire, flood, or other natural disasters. It won’t, as it’s only meant to cover your home appliances, including:

  • Washing machine
  • Dryer
  • Oven
  • Cooktops
  • Heating & cooling

So if any of these items break down, the insurance company will take on the costs of repairs or replacements.

How much can you expect to pay?

This is hard to say since not all insurance companies are the same, depending on the policy.

Competition in the home insurance industry is healthy, and the household brands offering similar insurance products would also be competitive in price.

What you end up paying will depend on what you want to be covered in the warranty. Itemizing the appliances, their style, brand, etc., will assist in assessing value for money. Some machines may not be accepted as part of the policy.

Generally, home insurance policies in America start from $300 and may rise beyond $600.

Some providers offer discounts to homebuyers, which are deals to attract new business, so it pays to research before acceptance.

Does a Home Warranty benefit Sellers?

Did you know home sellers often purchase a policy to attract buyers? While many appliances and products come with warranties, a home warranty is attractive to homebuyers and could make the difference between a sale and no sale.


So, is a home warranty worth it?

The answer to this question depends on whom you ask. For example, a home warranty is unnecessary when the manufacturer already covers the appliances.

However, when discussing older homes with older appliances, something can break down the next day, making a home warranty well worth consideration. The good thing about it is that most insurance companies won’t change their rates based on the age of your home or appliances, so you are free to take advantage of this.

Another benefit of a home warranty is that whenever something stops working, make a simple phone call, and a repairman will come around to inspect it and resolve the issue.

If you’re the type of person who prefers to be on the safe side, it’s worth it since the peace of mind this can bring is quite significant. However, do remember that the insurance company won’t cover all of the repairs in some cases, and you’ll still have to pay a percentage of the bill.


To summarize, home warranties are an exciting option for those who are entering the real estate market, those who live in an older home, and those who like to have things under control.

There are many insurance companies to choose from, and you can select home warranty plans that best suit your needs.

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