What is a Home Warranty, and How Does it Work?

A Home Warranty is a contract between a homeowner and a service provider that covers repair costs for a predetermined list of items in your home. Most mortgage lenders require their borrowers to have one, which can transfer to a new owner. Read more about the advantages and disadvantages of a Home Warranty.

It covers repair costs on selected items in your home.

A home warranty can protect you from unexpected expenses by covering the cost of repairs and replacing particular items in your home. For example, if your appliance breaks down, the warranty company will contact a repair professional in your area to make the repairs for you. If the repair is beyond the abilities of home warranty providers in PA, the provider may offer you a replacement model or money to buy it.

A home warranty covers major appliances and systems in your home, including plumbing, electrical systems, and roof leaks. Some home warranties cover major appliances and even a swimming pool. Homeowners’ insurance often doesn’t cover major appliances, so a home warranty may be essential if the costs are higher than your policy deductible. Most plans have basic coverage and optional add-ons for additional protection.

Mortgage lenders often require it.

Many mortgage lenders require home warranties for their loan applicants. Although these policies are optional, they may offer some protection and peace of mind. The lender may require homeowners insurance or may require proof of insurance annually. Flood-prone areas are more likely to require a higher level of insurance coverage. The lender will inform prospective borrowers of the terms and conditions of the homeowner insurance policy before approving a mortgage loan. A homeowner warranty will cover unexpected expenses such as water damage, structural damage, etc.

Home warranties cover plumbing and HVAC systems, fancy appliances, and parts. You can choose between basic and comprehensive coverage. Whether you purchase a primary or extended home warranty, it can be a great way to gain peace of mind and protect your investment. Home warranties also give you peace of mind as your appliances age. Contact a local home warranty company.

It can be expensive

A home warranty can be expensive, so you need to choose carefully. The costs of home warranties vary from company to company, and are based on the base plan coverage and any add-ons you purchase. You must also consider the service charges you’ll have to pay for claims and service visits. Read the fine print and ensure that the home warranty plan covers the major systems in your home, including your appliances and electronics. The purpose of home warranty coverage is to replace the parts of your home that have fallen victim to natural wear and tear.

Depending on the coverage you need, a home warranty can cost anywhere from several hundred dollars to more than a thousand dollars a year. The coverage cost depends on your home’s size and how many appliances and systems you have installed. Extending your coverage adds $100 to $500 per year. In addition to the home warranty cost, each repair you need to make will come with a service charge of between $50 to $100.