The Advantages and Disadvantages of Home Warranties
Home warranties are typically offered on any home whether it is old or new.
Why would this be the case?
Like anything else, there are pro’s and con’s to getting a home warranty. A home warranty protects the homeowners against problems that may go wrong with the house.
It is not however to be mistaken for homeowner’s insurance. A home warranty will not protect against fire damage or any other sort of jeopardy to the homeowner’s possessions.
The home warranty companies have a list of approved service providers and offer a discounted price on home repairs like pluming, electrical, heating, cooling and major appliances. The homeowner is only required to pay a small service fee to the service provider if the problem is severe enough to be covered by the warranty.
There is a reduction in the out of pocket expenses that homeowners may not foresee. It also removes the hassle of trying to find a repair person. According to a recent Angie’s List poll, 24% of its members claim to have a home warranty.
Getting a home warranty is very cost effective. It normally only costs a few hundred dollars a year. The factors that determine the cost of the warranty depend on the type of property.
This type of warranty is convenient for those who aren’t so handy around the house when it comes to making repairs and those who don’t have an emergency fund specifically for household problems.
But home warranties aren’t for everyone. There are many exclusions pertaining to what is covered under a home warranty. Often there are discrepancies between what is and is not properly maintained by the homeowner. Home warranties do not cover damage that is caused by neglect.
Some systems may be excluded from the warranty due to their age. If your refrigerator is over 15 years old, it may be excluded from your warranty.
There is also no freedom for the homeowner to choose their own independent contractor. This can be seen as either a positive or a negative because the homeowner may not wish to independently search for a suitable contractor.
The bottom line is, you should always understand the details of whatever contract you are signing.