home warranty cost

Are Home Warranty Plans Worth the Money?

Purchasing kitchen appliances such as a washer and dryer for your home are big investments — and sometimes you don’t know exactly what you’re getting yourself into. After buying some of these big-ticket items, you may explore the idea of home warranty plans. These plans can cover extensive damage to your home and help with the cost of replacing major appliances. Consider these five things carefully before deciding whether or not to purchase a home warranty plan. 

What is the Company's Reputation?

Unfortunately, some companies seek solely to scam you out of your money — you want to make sure that you avoid these groups. Before you sign documents with any company, check into the business's reputation. Visiting the Better Business Bureau's website will help you determine how dependable and trustworthy the company is. 

What Does the Plan Include?

Before you sign up for a home warranty plan, make sure that you know exactly what it includes. For example, you may see that it covers the cost of damage to the central air conditioning unit and assume that it will also help with repairs to the heating system. However, you shouldn’t assume anything — doing so could land you in major financial trouble. 

So, make sure that you go through the document carefully. If you’re unsure about what a part of  the document means, you should consult with a legal professional for full clarity.

What Does Your Home Insurance Include?

Prior to signing this home maintenance plan, you should grab a copy of your homeowner's insurance policy. Go through the document and check off items that both of them include. You may discover that your insurance policy actually already covers everything that the home warranty plan you’re looking at does. If that’s the case, then you don’t need to spend double the money for the same services. 

Also, you may discover that your insurance policy is missing only one or two items. You can call your company to see if adding them for a nominal price is possible instead of paying the cost for a full home warranty.

What is the Price of the Plan?

Breaking down the price of a plan is important, namely because you need to see if you can afford it. If the policy doesn’t fit in with your budget but you think it’s necessary to have, see if the company is willing to negotiate. You should also compare the cost of repairs without the plan to the price of the warranty. The point of the warranty is to save you money long term, and if it doesn't then you probably want to seek out a different policy.

What Are Your Future Plans?

Looking at the policy in terms of price is important, but you also want to think about how long you plan to stay in the house. If you’re planning to put the house up for sale in the near future, then signing up for this policy could be a waste of money.

If moving is a possibility, find out how long you have to commit to the warranty and if it’s transferable to a new property. On the flip-side, having the extra help could prove useful if something goes wrong while you’re trying to sell the house.

Last Updated: April 03, 2024