Introduction
Purchasing a considerably old home cannot always be regarded as a safe deal as information related to the items, their age, or useful life cannot be readily available. In addition, in the case of breakage, the search for a qualified service provider or handyman may be cost-efficient and time-consuming. This essay is dedicated to a home warranty as a way to protect a homeowner from unexpected challenges associated with an old house.
Definition of a Home Warranty
In order to avoid identified complications, an owner may be protected by a home warranty and a residential service contract for the coverage of the cost of the maintenance of household systems and appliances for a specific period of time. It ensures the functionality of systems and appliances, protecting an owner’s budget from substantial repair costs (American Home Shield, n.d.). Although a home warranty is similar to home insurance and a structural warranty, especially in terms of claims, premiums, deductibles, and liabilities, all three contracts have substantial basic differences (Home Warranty of America, n.d.). For instance, in contrast with a structural warranty, a home warranty refers only to already existing homes. In addition, while home insurance covers the damage or loss of property or items as a result of man-made accidents or natural disasters, a home warranty supports the functionality of broken or worn-out household systems.
Types of Coverage Plans
Every home warranty has a coverage plan – referring to individual contracts, coverage plans define what components and parts of a house will be covered in the case of their breakage. On its basis, there are three types of home warranty, including system, appliance, and combination coverage plans (This Old House, 2022). A system plan refers to the coverage of whole-home systems, such as heating, air conditioning, plumbing, water heater, electrical, ceiling fans, ductwork, smoke detectors, doorbells, and garbage disposal. In turn, an appliance plan covers a house’s appliances, including a dishwasher, refrigerator, stove, oven, range, microwave, clothes washer, clothes dryer, freestanding ice maker, and garage door opener. Finally, a combination plan covers both whole-home systems and appliances. A considerable number of home warranty companies allow to customize a coverage plan and include particular items that should be covered. Thus, an optional plan may include a hot tub, second refrigerator, spa, or pool, however, an additional cost may be added every month.
Price Ranges
In general, average home warranty costs range between $300 and $600 per year but they may exceed $800 depending on the types of items added to a coverage plan. Thus, “basic plans that cover only systems or only appliances may fall on the low end of that spectrum, while more comprehensive plans that include systems, appliances, and add-ons will fall toward the higher end” (This Old House, 2022, para. 8). In other words, system and appliance plans typically do not exceed $600, while a combination plan with add-ons may cost up to $800 and more – in general all prices are manageable in accordance with items covered.
In addition, besides a monthly premium, homeowners pay service call fees for every visit of a technician in the case of the breakage of covered items. In general, the majority of service fees range between $75 and $125, however, some companies offer lower fees as well. At the same time, owners are responsible for the coverage of the excess if items’ replacement costs exceed home warranty contract limits. In this case, it is essential to gather all necessary information related to an owner’s liabilities and out-of-pocket expenses established by a contract in order to evaluate all the financial advantages and disadvantages of a home warranty.
Conclusion
To conclude, a home warranty is a residential service contract especially essential for individuals who buy an old home, and information about the current state of household systems and appliances is unavailable to them. A home warranty has three types of coverage plans, including a system plan, an appliance plan, and a combination plan. Although the price of a home warranty is flexible depending on the items covered, an average price range is between $300 and $800.
References
American Home Shield. (n.d.). What is a home warranty? American Home Shield. Web.
Home Warranty of America. (n.d.). What is a home warranty? Home Warranty of America. Web.
This Old House. (2022). What is a home warranty? This Old House. Web.