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What Is a Home Warranty and Do I Need One?

What Is a Home Warranty and Do I Need One?

A home warranty is a service contract that helps protect homeowners against the cost of unexpected repairs to major appliances or systems that break down due to normal wear and tear. Home warranties cover breakdowns and system failures that are not covered by homeowners insurance. The amount of coverage is chosen by you when purchase the warranty.

You can choose coverage for a wide variety of appliances and mechanical systems. Examples of items that are often covered by a home warranty include:

  • Heating systems and ducts
  • Plumbing systems
  • Electrical systems
  • Water heaters
  • Kitchen appliances, including your oven, range, stove, cook top, dishwasher, and built-in microwave
  • Garbage disposal
  • Whirlpool bathtub
  • Plumbing stoppage
  • Garage door opener
  • Exhaust fans
  • Ceiling fans

Additionally, warranties can cover air conditioners, refrigerators, clothes washers and dryers, pools and spas, sump pumps, septic tanks and plenty of other optional items.

What Is the Difference Between a Home Warranty and Home Insurance?

Homeowners insurance pays for damages and losses caused by events like fire, weather damage, vandalism or injuries to guests. But insurance doesn’t kick in to cover breakdowns of home appliances or systems.

How Does a Home Warranty Work?

Let’s say you buy a new refrigerator and it dies after the manufacturer’s warranty ends. If you have a home warranty, you can file a claim with the warranty company. Their customer service team will connect you with an approved service provider who will come out, assess the problem and fix it.

Should Home SELLERS Get a Home Warranty?

A home warranty can protect sellers from unexpected repair costs while the home is listed. Also, if a potential buyer or an inspector finds something wrong with a system or appliance, the home warranty may cover it. That makes the whole selling experience less stressful.

At Servion Realty, we often work with Home Warranty of America (HWA), which offers free basic listing coverage for up to six months with the option to extend if the home stays on the market. Once the home is sold, the coverage can be transferred to the buyer at a competitive rate.

Should Home BUYERS Get a Home Warranty?

If you purchase a home that doesn’t come with a warranty transferred by the seller, then you may want to purchase one yourself. The warranty can really help if a system or appliance fails soon after you move in, which is especially helpful because after making a down payment and spending on moving costs many people really don’t want to have to lay out for an expensive repair. Plus, the warranty company makes things convenient by connecting you with a qualified service person who will come and assess the problem and fix it; that’s much easier than searching the internet and reading reviews.

Learn More About Home Warranties

Whether you’re buying or selling a property in Minnesota or Wisconsin, ask our Realtors about home warranty options. We’ll be able to explain the details and give you some more perspective. You can also read this home warranty FAQ written by HWA.

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