How to Determine if You Need to Buy a Home Warranty

A home warranty provides new owners with protection against maintenance problems within the first year. Here are some things to consider before you decide whether you should purchase a home warranty.

Instructions

Difficulty: Easy

Things You’ll Need:

• Home Inspectors
• Home Maintenance Warranties

1. Determine the age of the home. If the home is older than 10 years and its systems (such as its furnace, water heater, plumbing, appliances) are original equipment, it is possible that these systems could start malfunctioning.
2. Compare the cost of a home warranty plus the service call fee to the cost of repairing or replacing certain items that are likely to break; for instance, a new water heater can cost $300.00 without installation charges.
3. Compare the cost of a home warranty with the value of the peace of mind that a home warranty can provide. (It may be worth it to you to know that if any of the covered systems need repair or replacement within the first year, they will be fixed for the price of a service call fee.)

Tips & Warnings

• A standard home warranty costs approximately $250.00, with additional charges for air conditioning, pool, spa, roof and well pump coverage. A service call fee is generally $30 to $50.
• A home warranty covers items for 1 year from the date you purchase the warranty. A 1-year extension can be purchased for an additional fee from some companies.
• If you anticipate that the items covered under a home warranty will get lots of use or will likely need replacement within a year (for example, if the property is rental property), a home warranty could be a good deal.
• If you're particularly handy around the house - or if you have access to an inexpensive maintenance person, you may not consider the home warranty necessary.
• Each warranty company is different. Read the contract to identify what is covered before you sign.
• Each contract has limitations, conditions and restrictions. Read the contract thoroughly.