Maintaining a home is one of the biggest expenses you’ll likely face in life. While you are gaining equity, you have to factor in the cost of upkeep and utilities. But what if there is a major event, like your pipes bursting or your HVAC unit dying? Then the costs can become overwhelming. These risks are why you need to have a backup plan through a home warranty. Here, AIP House Buyers explains what a home warranty is and why it may be the safety net you are looking for.
What Exactly is a Home Warranty?
It is important to note right off the bat that a home warranty is not the same as homeowners insurance. Instead, it is a contractual agreement between a homeowner and a home warranty company that they will see to it that your home’s major systems and appliances are maintained properly.
Moreover, this contract is usually renewable annually and can be paid for either monthly or annually. With that in mind, your premium can vary depending on the size of your home, where it is situated, and what you need to be covered.
What Does a Home Warranty Cover?
CNBC notes that whereas homeowners insurance covers things like theft, damages caused by a fire, and personal injury on your property, a home warranty deals more with ongoing repairs and maintenance. For example, things like a blocked pipe, major problems with your heating or air conditioning unit, a blocked toilet, and leaks in your heating system are the type of things a home warranty company will repair at a discounted rate.
Benefits of a Home Warranty
A home warranty should assure you that your budget will remain intact if something breaks or needs servicing that would otherwise cost you an arm and a leg to repair. Other benefits include not having to stress about finding the right contractor for the job because you’ll already know who to call when you need them. There is also no waiting period involved for service providers, as there would be when making an appointment with other contractors.
Having a home warranty may also make you more likely to do complete replacements of older, damaged systems instead of doing patch work. These larger upgrades can really increase your home’s appraisal value, which is important if you’re looking to refinance or move in the future. Home buyers are often hesitant to purchase a home that will require major repairs in the next few years, so your home warranty can help you in multiple ways.
Put the Cost into Perspective
Yes, a home warranty can cost you a good chunk of change, but it’s important to look at the bigger picture. If your home is older and your major systems are original, you will likely save money with a home warranty. It is very expensive to replace pipes or an HVAC unit.
In addition, if you use your home for work, you may be able to deduct the premiums on your taxes. The IRS offers several deduction options for business owners and work from home employees, so take advantage of those choices. Also, when you’re researching the various policy options, here’s a possible solution that’s affordable and trustworthy.
What to Look for in a Home Warranty
It is important to note that the services provided will vary from company to company. Therefore, you will want to do some comparative research to see that you’re getting what you need. A quick way to expedite this process is to read through reviews and testimonials to find a good home warranty company in your area. You should also read through the contract to understand the following details:
- The coverage plan: deciding on what plan to go with should be determined by your preferences and your home’s projected needs. Determine if you require major coverage, which would include your home systems and major appliances, or if you could go with a less robust – and therefore less expensive – option.
- The costs involved: Take Charge America advises to do your research so that you understand the specific cost for each service, so that you are not taken off-guard by any additional hidden fees.
Keep All Your Documents Organized and Accessible
Once you have chosen a policy, you’ll want to ensure that this important document is kept somewhere where you can easily find it. For example, scanning and storing these documents as a PDF in a folder on your computer makes it easy to find and submit if there are questions about coverage surrounding a claim. And if you need to edit a large PDF to make multiple, smaller files, utilize this tool to split a PDF. It’s as easy as saving the file, renaming it, and downloading it.
Protect Your Investments with a Home Warranty
Buying a home is a big step. It’s best to protect it when you can. Taking out a home warranty is an essential part of purchasing a home. Plus, when you look at the larger impact to your home’s value and even your upcoming tax returns, investing in a home warranty becomes a no brainer. But read through reviews of local warranty companies before committing to one. It’s important that you find a company that will cover what you anticipate needing, and provide excellent customer service, too.
AIP House Buyers specializes in buying distressed properties and working with property sellers who just can’t sell the traditional route through a real estate agent. Give us a call today to find out more! (336) 707-5223