You’ve moved in. You’ve unpacked (most of) your boxes. You’ve figured out about half of the light switches. You are well on your way to conquering that new house checklist.
Before declaring victory, consider what you need to do to protect your home. You probably purchased homeowners insurance while processing your mortgage paperwork. But beyond that, what else is needed to cover your assets?
This is where a home warranty comes into play. Home warranties can be a good option for new homeowners, but it’s important to fully understand what they are – and what they can and can’t do – before purchasing.
So, without further ado, let’s answer some of those burning questions about home warranties.
Whatisa home warranty?
A home warranty is like an insurance policy for appliances and home systems, such as refrigerators, plumbing, water heaters and even garage door openers. They cover items that started off in good condition but fail due to normal wear and tear.
Let’s say you move in and a year later your HVAC system goes on the fritz. That could cost you thousands of dollars to repair or replace, but if you have a home warranty, you may only pay a fraction of the cost before it’s fixed (more on costs later). Plus it’ll save you time that would have otherwise been spent searching for a certified repair person.
How does it differ from homeowners insurance?
Homeowners insurance helps to cover structural damage and loss of personal property from calamities such as theft or fire, while a home warranty covers repairs and replacements of appliances and home systems due to regular wear and tear. Also, homeowners insurance is required when purchasing a home via a mortgage, whereas home warranties are optional.
For example, if your stove isn’t working because it’s 15 years old and it’s reached the end of its rope, you’d use your home warranty. But if damage from a fire caused your stove to malfunction, that’s where your home insurance would help.