There is a way to protect yourself from expensive appliance repairs. Home warranty plans take the guesswork out of the home appliance, heating, and AC unit repairs and help homeowners budget for home maintenance costs for the year. The warranty provider charges a yearly or monthly fee to cover listed appliances and home mechanical systems. Then, when repairs are needed, the homeowner calls the provider and they send out a repair service to fix them at a small set fee. Since a single appliance repair bill can be in the hundreds of dollars, this can be a great money saver.
What is Home Warranty Insurance
A home warranty insurance plan is different from homeowner’s insurance in that homeowners insurance covers the home losses from disasters and damage while a home warranty covers listed appliances and systems when they break down with normal use. The exact definition of a home warranty is a home service contract covering the cost of repairing or replacing household systems and listed appliances for a year or other set time.
· This home warranty is actually a service contract for a set amount of time agreeing to cover costs of maintaining appliances and home systems that are listed.
· Homebuyers who are purchasing older homes with systems and appliances that don’t have information available are often advised to get a home warranty. Some realtors even give these buyers a one-year home warranty as part of the purchase.
· A home warranty has a yearly cost of between $350 and $600 per year and a per-call service charge of between $50 and $100.
· A home warranty will list the covered appliances and systems and the conditions governing whether repairs or replacement will be covered.
How Does a Home Warranty Work?
The home warranty service provider has contracts with home and appliance repair contractors at reduced costs. These providers might be plumbers, electricians, HVAC specialists, or appliance repair technicians. When a claim is called in, they send the appropriate provider out to assess the claim and decide if it is covered. If it is covered, they do the repair and the homeowner pays only the specified service charge.
If the appliance needs replacing, the warranty company also has contracts with appliance retailers at special prices. If appliance replacement is in the home warranty contract and approved, the warranty company will pay for a new appliance from their provider and their approved model list. The homeowner does not get to go shopping for their own appliance at any cost. This limitation can be a problem.
It is important to read a prospective home warranty contract carefully to note coverages and rules and limitations to avoid disappointment later.
Just What Does the Home Warranty Cover?
Most home warranties cover major home systems such as electrical, plumbing, and HVAC. Then, they cover appliances such as ranges, ovens, water heaters, and refrigerators. Since plans from different warranty companies offer different coverage details, it is important to read carefully which appliances and systems are covered and to request those missing appliances such as garage door openers, washers and dryers, and others be added to the contract. The added appliances will increase the warranty cost.
It is very important to be clear on what home warranty limitations are to avoid conflicts later on.
· Appliances not listed in the contract will not be covered.
· Appliances with known damage before the contract was signed will not be covered. The warranty company that sends out a home inspector before issuing the contract is preferred. If this is during the purchase of a home, the buyer should ask the seller to repair or replace damaged appliances before closing.
· The warranty will not cover appliances that are poorly maintained, misused, or improperly installed.
· A home warranty will not cover cosmetic damage such as scratches and dents.
· The warranty will not cover home modifications needed to install appliances or systems.
· Home warranties will not cover appliances and damage covered by the manufacturer’s warranties or by homeowner’s insurance.
· Home warranties do not cover damages caused by pests.
The 10 Most Expensive Appliance Repairs
Some repairs are less expensive than others and some appliance repair bills will put a real dent in the homeowner’s budget. Here are 10 appliance repairs that cost the most:
1. Water heaters can cost from $523 to fix or $1,000 to replace. At this point replacement of an older water heater might be the best decision.
2. Plumbing problems can be very costly to fix. A sewer line can cost on average $2,443 and a drain pipe repair or replacement can be $559. If new plumbing pipes need to be installed the cost can top $1,054.
3. Heating and Air conditioning repairs can start at $288 to $372 and go up from there.
4. Electrical problems can mean old wiring that needs updating and the costs can range from $318 for small repairs to $15,000 for rewiring a home.
5. Septic system repairs can run $1,488 and up depending on the scope of the work needed.
6. Refrigerators /freezers can cost between $200 and $450 to repair.
7. Washers and dryers can cost from $100 to $430 to repair.
8. Ranges and ovens can cost between $100 and $430 to repair.
9. Foundation problems are not covered by most home warranties and they can cost between $450 and $11,000 to remedy.
10. A home’s roof can cost from $650 to repair and $6,000+ to replace and is not covered by most home warranties.
11. An additional damage cost to consider is insect damage such as termites. This damage repair and removal can cost from $541 to $7,229.
Not all of these systems and home features are covered by home warranties but the homeowner can do things to avoid these large repair bills. Maintenance and awareness are the key ways to avoid large home repair bills. Maintain all the aspects of the home on a regular basis. Have the roof and foundation inspected regularly to catch problems while they are small. Walk around the home inside and out regularly to catch small problems and check for insect damage.
When a homeowner does their part to keep their home in good repair, the costs of broken appliances and malfunctioning home systems can be kept to a minimum. Purchasing a home warranty can be very cost-effective if the home and appliances are older. Always read the home warranty contract carefully and ask for changes that will serve your needs better.