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  • Writer's pictureCPI Commercial Luxury Group

Home Warranty Explained

Updated: Oct 26, 2023

Coverage, Costs, and Worthiness for Home Buyers

Introduction When you're in the process of buying a home, you'll encounter a multitude of decisions to make. One question that often arises is whether to invest in a home warranty. In this blog, we'll delve into what home warranties cover, and their associated costs, and help you determine whether they are worth considering for prospective homebuyers.

What Do Home Warranties Cover? Home warranties typically cover major systems and appliances within your home. Here's a breakdown of common inclusions:

  1. HVAC Systems: Heating, ventilation, and air conditioning systems are often covered, including furnaces, central air conditioning units, and ductwork.

  2. Electrical Systems: This may include wiring, electrical panels, and outlets.

  3. Plumbing Systems: Plumbing coverage usually encompasses pipes, water heaters, toilets, and faucets.

  4. Kitchen Appliances: Refrigerators, ovens, stoves, dishwashers, and built-in microwaves are commonly included.

  5. Laundry Appliances: Washers and dryers may be part of the coverage.

  6. Garage Door Openers: Some plans extend to garage door openers and related components.

  7. Optional Add-Ons: Depending on your provider, you can opt for additional coverage for swimming pools, spa equipment, well pumps, and more.

What Are the Costs of Home Warranties? The cost of a home warranty can vary depending on several factors:

  1. Coverage Level: The extent of coverage you choose significantly impacts the cost. Basic plans that cover only major systems tend to be more affordable than comprehensive plans including appliances.

  2. Service Fee: Each time you request service, you'll typically pay a service fee or deductible, which can range from $50 to $150 or more.

  3. Provider: Different home warranty companies offer various plans at different price points. It's essential to research and compare providers to find the best value.

  4. Location and Home Size: Where you live and the size of your home can influence the cost of a home warranty. Prices may vary based on regional factors and the square footage of your property.

  5. Optional Coverage: If you choose to add optional coverage items, your overall cost will increase.

Are Home Warranties Worth It for Home Buyers? Now, the million-dollar question: Are home warranties worth it for homebuyers? The answer isn't one-size-fits-all. Consider these factors:

  1. Age of Systems and Appliances: If the home you're buying has aging systems and appliances, a home warranty can provide valuable coverage against unexpected breakdowns. Newer homes may benefit less.

  2. Peace of Mind: Home warranties offer peace of mind, knowing that you won't face exorbitant repair or replacement costs shortly after moving in.

  3. Budgeting: Home warranties can help you budget for unforeseen maintenance expenses, as you'll have a predictable service fee for covered repairs.

  4. Negotiating Tool: You may use the inclusion of a home warranty as a negotiating point when finalizing the home purchase, potentially saving you money on closing costs or the home price.

  5. Provider Reputation: Research home warranty providers thoroughly. Choose one with a good reputation for customer service and claim handling.

  6. Exclusions and Limitations: Be aware of the policy's exclusions and limitations. Ensure that the items you want to be covered are included.

In conclusion, home warranties can be a valuable investment for homebuyers, especially when purchasing older homes or properties with older systems and appliances. They offer financial protection and peace of mind against unexpected repair costs. However, it's crucial to assess your specific situation, compare costs, and carefully read the terms and conditions of the warranty to determine if it aligns with your needs and budget. Ultimately, the decision to purchase a home warranty should be based on your individual circumstances and preferences.


Disclaimer: The information provided here is for general informational purposes only and should not be construed as professional advice or a substitute for professional consultation. Home warranties and their terms can vary widely, and it is essential to consult with a qualified professional or read the specific terms and conditions of your home warranty contract for accurate and up-to-date information.


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