Many homeowners seem to think that having a home warranty is a good idea, and maintain it as a high priority item, but most do without it. When it comes time to sell, however, the perspective changes and having such a policy may have added advantages. In this article we cover some of the reasons why this is so.
OK, What Is a Home Warranty?
The home warranty is a type of insurance that covers all the repairs (or replacements if repairs are not possible) of any appliances or major systems that are installed in the home, such as heating system, plumbing system, drain stoppages, range, and related items. Coverage may also include other items such as the pool and A/C if they are specifically covered. The basic concept is similar to the homeowner insurance but while homeowner insurance is purchased to provide protection against risk of damage to the building and the belongings inside it that are caused by environmental factors such as fire or hail, or dangers such as burglary, the home warranty provides coverage on breakdown of systems and appliances that are a part of the house.
If you pay for a home warranty policy you are covered against having to pay the expenses that would be incurred if any of the covered systems or appliances within the house stop working. There will be normally only a small service fee when the repair person makes a house call to repair something. These fees, which are set in advance, are small if you compare them with the costs of replacement. Usually, the price of a home warranty policy is less than a homeowner policy. This is due to the narrower spectrum of coverage and the generally lower cost of repairing or replacing covered items.
Based on the annual fee you want to pay, you would need to decide the policy length for which you are willing to sign up. There are warranties that last a year and there are longer policies. In general, a longer period will have a lower annual cost.
As with all other insurance instruments, the home warranty comes with various features and you will find a range of different quotes from different companies that sell it. In order to get the best deal, check around and investigate several sources. Using a phone directory or the internet, or asking your Realtor, makes it easy to get yourself informed.
In summary, having a home warranty is a definite advantage for a homeowner. This is especially true when ready to sell.