A lot of people think that getting a home warranty when they purchase a property means peace of mind. However, that is not always the case. So is a home warranty worth it? Home warranties can either be worthy or be a waste of money, depending on several factors. Here is what you need to consider to make your home warranties worth it:
1. New or Old House
If you are buying a newly constructed house directly from the developer company, chances are you won’t need a home warranty. The house will most likely include warranties for almost everything in it. Plus, since all the systems are new, they are less likely to break down.
On the other hand, buying a house that has already been occupied will likely come with some risk. Some systems might have wear and tear or be near the end of their lifespans. It is highly advisable to have the home inspected and consider a home warranty based on what you may need.
Check out the price of the warranty package and see what systems are included. Most home warranties only cover HVAC, electrical, and plumbing. You can probably get add-ons for the pool, the septic, and other supporting systems. However, most contracts do not include structural elements such as walls, flooring, doors, and windows.
It is crucial to estimate the amount of money you will have to spend to repair or replace something if you don’t have it under warranty. The inspection will also tell you which systems are at risk of breaking, so you can take that into consideration as well. Also, bear in mind that most home warranties only last one year, and you can renew them annually. Make sure to consider the period of coverage to determine whether your investment is worth it.
3. Terms and Conditions
Some companies have elaborate policies to avoid taking responsibility for damage to your house. Hence, make sure to read through all of their terms and conditions. Here are some possible problems you need to anticipate:
● Dollar limit per day for the repairs
● Denied claims due to improper maintenance
● Companies get to decide whether to repair or replace regardless of your opinion
● For replacement, companies get to decide which model and brand to buy, even if you are not happy with their choice
4. Company’s Reputation
Go to the Better Business Bureau website and see the company’s rating. This is a pretty reliable indicator because the rating is calculated based on the company’s size, the number of complaints they receive, and how well they respond to every complaint.
If you choose to get a home warranty, make sure to choose the contract as carefully as possible. Have a few candidates on your shortlist. Do your research and compare each option so you end up with the most reliable one.
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