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If you are looking into purchasing a house, regardless of whether it’s a new one or not, the opportunity may present you to invest in what is known as a home warranty. This is like a financial safety net that protects you against unforeseen and expensive repairs that you may need in the future. It sounds like a good idea, but really is it as good as people think it is?

In the following post, we are going to be looking at the pros and cons of home warranties. But first, let’s explain what it actually is, as there is some confusion. If you know you want to invest in one, see the list of what we consider to be the best.

What is a Home Warranty?

The first thing that needs to be explained about a home warranty is that although it seems the same, it is nothing like homeowner’s insurance. While homeowners insurance will cover you against issues and incidents like property crime, hail, fire, and some water accidents and damages that could affect the structural integrity and safety of the building as well as your possessions, a warranty is simply a contract between the homeowner and a provider for a reduced price repair and replace service.

This covers the main components in the home such as the electrical and plumbing system, the HVAC, and furnace. Some appliances may be covered too such as refrigerators, washers and tumble dryers, and even swimming pools.

These things are often not covered by homeowner’s insurance.

The home warranty company has an agreement with the service provides. When the homeowner calls to report a problem, they will send out an appropriate service provider. If the repair or replacement is necessary and covered by the warranty, they will carry out the relevant work.

Now that we’ve outlined the basics, let’s look at some of the pros and cons to help you determine whether it’s right for you.

warrr Do You Need a Home Warranty?

Pros of Home Warranties

Similarly, to any warranty, a home warranty can act as a way to avoid having to pay expensive bills, especially those that are necessary but were not planned for. If you do not have any emergency funds or are saving those for something else, a home warranty can act as a great buffer.

A home warranty is also ideal if you are not particularly good at handling repairs yourself.

A home warranty helps avoid the need to search out a contractor to complete the repair.

A home warranty may also be a good idea if you have particularly expensive taste in home appliances.

Cons of Home Warranties

Perhaps the biggest downside to home warranties is the fact that they don’t cover any home components that have not been maintained properly. That may not sound bad as you would expect there to be certain rules and criteria. However, it is what constitutes as being properly maintained that is, he issues. This is not a black and white area and can cause disputes between warranty holders and the warranty companies.

You don’t have the freedom to choose the contractor you want to use to carry out repairs and replacements.

So, you should invest in a home warranty. It really depends. It is by no means a perfect solution for avoiding hidden costs and risks. Neither is it a completely bad thing. The best thing to do when you are looking at getting a home warranty would be to read the fine print carefully and consider how much trouble it may be to get the warranty company to pay up and if it’d going to be worth it in the end.

Reviews by other customers who have had warranties with a supplier can be helpful.