Home warranties can save homeowners time, money and stress by providing a buffer against expensive, unforeseen repairs. They also offer a convenient, efficient way to handle cosmetic issues like that unsightly scratch on your dishwasher or the dent in your refrigerator.
However, there are a lot of misconceptions about home warranties out there that can cloud their value. Here are some of the most common:
- They’re the Same as Home Insurance
Home warranties, which are actually service contracts, do not replace homeowners insurance. Instead, they fill in a gap between the coverage provided by homeowners insurance and what is needed to cover repairs and replacement of major systems and appliances due to normal wear and tear.
New home buyers often receive some type of warranty from the builder for one or two years on things like built-in appliances, heating and cooling systems and plumbing fixtures. Many credit cards also offer extended manufacturer warranties on purchases of major appliances.
The best home warranty company in California is attractive to homeowners who don’t have enough money set aside for emergency repair bills or who want to reserve those funds for other needs. However, they may not be worth the cost for other types of homeowners.
- They’re a Scam
While home warranties do provide some homeowners with a little extra protection, they also come with their own set of problems. Scams are common and have given the industry a bad reputation. Luckily, when it comes to home warranty scams, there are some warning signs you can look out for.
One way to spot a scam is by looking at the company’s marketing tactics. For example, if a home warranty company constantly sends you emails or phone calls that claim your policy is about to expire, they’re probably a scam. Oregon and Tennessee attorney general offices have warned homeowners of a specific home warranty scam that uses your mortgage lender’s name and address, which are easily accessible information.
- They’re a Waste of Money
Home warranties help homeowners protect themselves from expensive repairs and replacements for items like appliances, heating and cooling systems, and plumbing. However, they do not cover natural disasters, faulty construction, or pre-existing conditions.
Many people believe that home warranties are a waste of money because they cost a lot of money and do not cover everything that could go wrong with a house. However, if people understand what they actually do and don’t cover, they can make an informed decision about whether this type of protection makes sense for them.
- They’re a Waste of Time
A home warranty can save new homeowners from unexpected repair costs and provide them with peace of mind. However, misinformation and misconceptions can hinder people from reaping the benefits of a home warranty.
Home warranties are not the same as homeowners’ insurance and they provide specific coverage for appliances and systems in a home. They usually have limitations and exclusions, so it’s important to read the fine print to know what you’re getting into.
Whether you’re new to homeownership or have been a long-time owner, debunking these common home warranty myths will help you make an informed decision about a service plan that suits your needs.
- They’re a Waste of Energy
Many homeowners lack an in-depth knowledge of home warranties. That’s why it’s important to educate yourself and separate fact from fiction. Researching reputable providers, asking for recommendations, reading reviews and reviewing contracts is the best way to make an informed decision about whether or not a home warranty is right for you.
Home warranties can provide homeowners with valuable protection and financial peace of mind. However, it’s crucial to understand their limitations and exclusions before making a purchase. By debunking these 7 common misconceptions about Home Warranties, you can make an educated and confident decision about your coverage needs.
- They’re a Waste of Money
Home warranties are a type of service contract that cover repairs or replacements for appliances and systems in your house. They cost extra and work a little bit like insurance.
Some people feel that they are worth the money because they provide peace of mind. It can also make sense for new homeowners who want to limit their expenses after the manufacturer’s warranty expires.
However, if you follow my advice and have six months of expenses set aside in an emergency fund plus homeowners insurance, you probably don’t need a home warranty. Especially since most appliances and systems come with their own manufacturer’s warranties or can be covered by credit cards.
- They’re a Waste of Time
Home warranties are not scams. Before you decide to sign a contract, you should always do your research and compare prices. You should also read the fine print and check reviews to find out exactly what’s covered by your policy.
Home warranties offer homeowners protection against unexpected repair costs for appliances and home systems. However, many misconceptions exist about home warranties that can lead to confusion and misunderstanding. By debunking these myths, you can gain a better understanding of home warranties and decide whether they are right for you.