The Pros and Cons of Buying a Home Warranty Plan

The Pros and Cons of Buying a Home Warranty Plan

Pros and Cons of a Home WarrantyPotential home buyers may see that some homes offer a home warranty. Another scenario is that a home buyer may be given the opportunity to purchase a home warranty at the same time as they complete the transaction to buy their home. A home warranty is designed to help consumers manage those repairs that often crop up unexpectedly. The following pros and cons can help a homeowner decide if such a home warranty is the right choice for them when buying a home.

Pros of Purchasing a Home Warranty

Many of the pros of purchasing a home warranty center around peace and mind and saving money. A homeowner can realize savings on the repair or replacement of many systems and appliances such as plumbing fixtures, stoves and electrical systems as well as discounted service calls. These are typically charged at a flat-rate fee that is reduced when compared to regular repair visits.

When upgraded contract options are purchased, they often offer further reductions on service call fees. Depending on the home warranty company, sometimes enhanced coverage options allow homeowners to cover other items such as spas, pools and more for an additional fee. Calling one phone number sets in motion the process to get a covered service repaired or replaced and provides peace of mind for homeowners who want to spend more time enjoying their home and less time worrying about major repairs. Opting for a home warranty also helps prevent a homeowner from going into debt or depleting a savings account to pay for major repair work when they buy a Minnesota home.

Cons of Purchasing a Home Warranty

While a home warranty can provide the new owner of a home with the peace of mind of knowing that unexpected repairs could be covered, there are some cons that should be considered when it comes to purchasing one outright. For example, a newer home—one that is less than five years old—might not require repairs. The the home warranty company chooses the repair service providers that are sent to a home—not the homeowner. The warranty provider is also the one who decides whether a repair or replacement is necessary. This could mean that the homeowner might be stuck with systems or appliances that are outdated and/or obsolete.

A home warranty typically covers only the home owned by the purchaser. In addition, certain dwelling types—mobile homes and mixed-use properties, for example—might not be covered. Rented homes, dorms and timeshares are often not covered under a homeowner's home warranty.

Some systems—for instance, the refrigerator, septic or air conditioning—might not be covered under a basic home warranty and could require an upgrade. Often there are caps that stipulate limits in the amount and frequency that a warranty provider will pay out per system, per incident and per time frame. Warranty exclusions that stipulate coverage is only in the event of operational failure are common.

A homeowner needs to maintain the systems and appliances on a regular basis in order for coverage to apply. DIYers could save more money making repairs themselves. This is not typically an option offered by a home warranty company, though.

Careful consideration of a homeowner's lifestyle, repair skills and ability to save for major repair and replacement costs are at the heart of the home warranty decision. The above pros and cons provide a homeowner with an objective overview to keep in mind when deciding if the purchase of such a warranty is beneficial for them.

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