There has been a lot of talk lately about home warranty plans. Some people love them, others don’t feel that they’re worth the money, and additional homeowners are still on the fence. This article will discuss home warranty plan cost and associated fees and compare them with those incurred by homeowners who choose not to protect their appliances and systems. By the end, it should be clear whether home warranty plans can save homeowners money.
What Is a Home Warranty?
A home warranty is a type of service contract designed to cover multiple appliances or systems within a home. Also called home protection plans, home warranties vary significantly in terms of coverage options. The most affordable plans cover only major kitchen appliances, while the most comprehensive cover repairs to and replacements of everything from washers and dryers to plumbing, HVAC, and electrical components.
How Much Does a Home Warranty Cost?
The cost of home warranties varies depending on several factors. The first is which company homeowners choose to work with. It may be tempting to opt for the company that offers the lowest monthly rates with no further consideration, but that’s a mistake. It’s not uncommon for home warranty providers that offer unusually low rates to charge hidden fees to bolster their profits. Thankfully, though, there are also plenty of home warranty companies that offer competitive pricing and transparent fee schedules.
Once homeowners choose which home warranty company to work with, there are still a few factors that will go into determining the cost of the plan. The first is what level of coverage homeowners opt for. Reputable companies always offer multiple options for different budgets, with the more expensive plans covering a wider range of appliances and systems.
The second factor that influences pricing within the same company is how homeowners choose to customize their plans. Some companies allow customers to add or subtract appliances depending on what’s still covered under manufacturers’ warranties, which can impact monthly fees.
Why Not Just Save for Repairs?
Most of the people who fall on the side of believing that home warranties aren’t worth it recommend just putting the money aside to save for repairs, instead. More often than not, these nay-sayers have yet to experience a major appliance failure. Some home warranty plans cost as little as $25 per month, which adds up to roughly $300 per year, and these plans pay for not just repairs but also unit replacements if they’re needed.
Take a look at how much it costs to repair or replace major appliances, then do the math. It should be clear that saving the money that’s not being spent on monthly payments to a home warranty company is very unlikely to help homeowners pay for even relatively minor repairs by themselves.
The Final Verdict
So, are home warranty plans worth it? Ultimately, homeowners will have to decide for themselves. If their homes are brand new and all of their appliances and systems are still covered by the manufacturers’ warranties, it may not be worth the cost. Otherwise, though, it’s clear that a home warranty can save homeowners a lot of money.
