Is a Home Warranty Worth It?

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When you purchase a new home, it is common for your purchase to come with a one-year home warranty. After that first year passes, you have the option of continuing to pay for that home warranty or letting it expire. The question many new homeowners frequently have is whether or not it is truly worth the expense to pay for that home warranty each month.

Let’s take a close look at home warranties in Pennsylvania, what they can do for you and what you should consider when deciding whether or not you’ll continue to pay for one.

What home warranties do

People often think of a home warranty as an insurance policy, but it’s really more akin to a service contract. A home warranty covers the costs of repairs or replacement of some items in your home that came with it, including some appliances, plumbing and electrical infrastructure and HVAC. The warranty will not cover any structural features of the home, or some of the other separate issues that would be covered by homeowners insurance.

Instead, the purpose of the warranty is to cover items that are in working condition when you take ownership of the home, then fail with regular wear and tear. Many realtors recommend home warranties to sellers as a way to attract buyers, which is why buyers often take on home warranties for at least the first year. But realtors also frequently recommend warranties to buyers if one does not come with the purchase of the home.

The big question

As for the question of whether or not the home warranty is worth the price you’ll pay, this really depends on your individual circumstances.

On average, a home warranty will cost anywhere from $400 to $600 a year, but it can be more expensive if you want more enhanced coverage options for additional systems. In addition to the premiums you have to pay, you will also have to pay fees for any service calls you make. While the repairs themselves will be covered by the warranty, you can expect to pay a $50 to $150 service fee each time you have someone come out to your home to investigate the issue or make the repair.

Essentially, what you need to consider is this: you can save hundreds of dollars per year by not purchasing a home warranty, but if something goes wrong with your appliances or systems, that could set you back hundreds or thousands of dollars anyway to make the necessary repairs or replacements.

You might consider purchasing a home warranty if the home inspection reveals some of the systems in your home are close to the end of their useful life. However, if you built a brand-new home yourself and all of the appliances and systems are brand new, you’ll generally be covered by a warranty from the builder for the materials and workmanship in the home. New appliances will also be covered by a manufacturer’s warranty, so it’s generally not worth purchasing a home warranty for a newly-built house.

For more information about home warranties in Pennsylvania, contact the team at WSL Incorporated today.

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