Many people wonder whether they really need home warranties. One way to decide is to analyze the cost of repairs to major systems and appliances should they fail. Heating systems may cost more than $1,000 to replace, while a hot water heater is likely to cost more than $400. You could spend thousands more if your electrical systems, plumbing, range or refrigerator need to be replaced. Compare this likely cost with cost of an annual premium and a service call charge, and you will be able to judge whether it’s worth it to get a home warranty.



Keep in mind that even when your home is brand new, things can go awry. Appliances break down and systems fail. If you have just spent a fortune on your new home, the last thing you want is to spend more money on costly repairs. A home warranty gives you peace of mind provided you have the right one. This type of insurance protects against some of the mishaps which can and do happen in new and mature homes alike. Here are some observations on home warranties.





Some home builders will offer you a warranty for your home. Depending on where you live, your home may come with a warranty on at least the construction, as this is required in some states. Most of the warranties that are offered by a builder only cover your appliances and major systems for a limited period of time. Most of these warranties only cover structural problems. You may also experience difficulty locating the builder to make a claim as well, especially if they have moved on to another project. The nice thing about a builder’s warranty is that it is very often included in the purchase price of your home. There are also individual, private companies that will offer you a warranty that you can purchase on your own. These policies can cost several hundred dollars annually, but if your home is going to need repairs, these warranties can be well worth the price. Many of these types of service contracts will last for ten years after your purchase date.



When you are shopping for a home warranty, you really need to take the time to read the fine print. You need to understand exactly what your policy protects and what is not covered. In most instances, when you have an appliance or home system that malfunctions, you contact your warranty provider and they send out a contracted repair person. Usually a home guarantee contract includes coverage for air conditioning and heating systems, fridges, stoves, refrigerators, fans, indoor plumbing, garbage disposals, telephone wiring and electrical systems. Keep in mind that not every policy will cover all of these eventualities. You also need to know if outdoor systems are included, and what types of things can make your warranty void like not having maintenance performed regularly.