Why Are So Many People Buying Home Warranty Plans?

Over the past few years, the popularity of american home warranty plans has been on the rise. This can seem strange to some, especially new homeowners who have never had to deal with an equipment failure. After all, shouldn’t homeowners’ insurance be enough?

Unfortunately, the answer is no. While there’s no overstating the importance of having a homeowners’ insurance policy in place, that only covers part of the equation. Homeowners can file claims against their insurance after major disasters, but what happens when equipment breaks down as a result of general wear and tear? Without a home warranty, the family has to pay for repairs out-of-pocket.

How Home Warranties Can Help

Home warranties, also called home protection plans, cover appliance and equipment breakdowns that occur as a result of wear and tear. They make a perfect complement to traditional homeowners’ insurance policies. It’s worth noting here that technically, home warranties are not insurance products, nor are they literal product warranties. They’re actually service contracts, which is even better.

A residential service contract is an agreement that homeowners enter into with a third-party provider, in this case, a home warranty company. The company agrees to pay for service to covered appliances and equipment, for which the homeowner pays a predetermined monthly fee. This arrangement not only cuts back on costs should a covered piece of equipment fail but also makes it much easier for homeowners to budget effectively.

How to Choose a Home Warranty Plan

The first thing homeowners need to do if they want to take advantage of all that home warranties have to offer is to find a reliable, reputable provider. The unfortunate truth is that not all home warranty companies are created equal. Some engage in disreputable practices or utilize exploitative techniques to get homeowners on board, and they must be avoided. However, there are also plenty of reliable home warranty companies that pride themselves on transparency and customer service, so don’t be scared off by the bad apples.

Once homeowners find a reliable home warranty provider, they can check out what plans are available. Most companies offer a range of coverage plans. The most affordable are appliance-only plans, which only cover major kitchen appliances. From there, homeowners can upgrade to complete-home plans that also cover major home support equipment like plumbing, HVAC, and electrical components, or they can go all-out and ask about premiere plans that offer maximum coverage. There are options to fit any budget.

Home Warranties Are Worth the Cost

The bottom line here is that home warranty plans are almost always worth the cost. The only exception is for new-built homes that are still covered under builders’ and manufacturers’ warranties. In those cases, it makes more sense to wait for the existing coverage to expire to take out a home protection plan. Otherwise, though, homeowners who are late to the game should consider catching up to their peers and purchasing home warranty plans before anything goes wrong. They can make a large difference when it comes to budgeting for appliance and equipment repairs.