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Why home warranties are a smart investment for homeowners in 2021

12th January 2021 Print

Purchasing a home is a huge decision that involves a fair amount of risk. Even if you already own your home, there are costly repairs on all your major systems to consider, and expensive appliances breaking down, too. If you don’t have any savings, a significant failure and repair can end up breaking the bank and costing you a lot of money.

So How Can You Protect Your Home from Costly Repairs?

The best way to protect your property is by purchasing home warranty plans. This will ensure your home and appliances are completely covered. Whether you want to protect your family, or if you are a house flipper who wants to protect their investment, home warranties provide the full coverage you need. A great example of a company that provides home warranty plans is 2-10 Home Buyers Warranty. With over 40 years of experience, they are a leader in the home warranty industry. Also, they accept and payout 97.5% of claims and have covered more than six million homes!

Home Warranties vs. Home Insurance: There Is a Difference!

Though you may think home warranties and home insurance are essentially the same, that’s actually not true. They offer coverage on two different areas of your home, and many homeowners choose to get both insurance and a warranty so they’re 100% protected.

Home insurance covers unexpected damages: natural disasters, storms, and fires. It also covers any thefts or vandalism. However, it doesn’t cover repair costs that come with everyday wear and tear on your appliances and the critical systems that keep your home running smoothly, such as your electrical wiring, plumbing, or central air. That’s why home warranties are such a smart, money-saving investment—they provide affordable and full coverage in the event of a system breakdown.

How Does a Home Warranty Work?

A warranty for your home is essentially a contract between you (the homeowner), and the warranty company. Each year, you pay an annual fee for coverage on appliance breakdowns and system failures resulting from daily usage. You pay a flat rate deductible for expenses so next time your stove or fridge stops working there won’t be a huge repair bill to pay.

For those of us that don’t have emergency funds or a nest egg tucked away, not paying a couple grand out of pocket to keep the refrigerator working is a huge boon. That’s why homeowners and house buyers are getting warranties for their home, because they can see the benefits that comprehensive coverage provides.

Example of How a Warranty Protects Your Home

Okay, so let’s look at an example of why home warranties are so beneficial. Let’s say you come home from work one bitterly cold winter night to find your house roughly the same single-digit temperature as the outdoors. You take a look in your basement and, lo and behold, the furnace is broken. The house feels like an icebox, the kid’s teeth are chattering, and your spouse is glaring daggers at you while simultaneously pulling another sweater over their head.

You’re in luck, though, since your home is covered with a comprehensive warranty. All you have to do is make one simple phone call to your warranty company. They do all the work for you by calling their service providers, who then come to your house, determine your eligibility, diagnose the problem, and then fix your furnace for one low flat rate. That’s it! It’s as easy as making a phone call, and you can rest assured knowing you are covered. The flat rate you pay depends on what level of coverage you have. As the buyer, you also have the option to purchase varying amounts of coverage. It’s straightforward to select a plan based on the size of your home.

Why Getting a Home Warranty is a Smart Move?

There are numerous benefits to getting a warranty plan for your home. While it is a decision not to be taken lightly, in the current economic climate of America, having full coverage on your home is incredibly important. Having a plan saves money since you won’t have to foot the whole bill for extensive repairs on your home. It’s generally a good idea to have both insurance and a warranty since the two complement each other to give you complete coverage. Here are some of the benefits of having a warranty plan in place for your home and appliances.

- It gives peace of mind when it comes to system and appliance breakdowns. When you have a warranty, you can relax knowing that you’re covered. Especially for older, first-time homeowners and those that aren’t very handy around the house, the knowledge that you’re protected in the event of a breakdown is something worth more than money. If you’re in the business of flipping houses, it can be imperative to have complete coverage to protect your investment. Also, having a warranty is a powerful sales incentive for anybody selling their home.

- Having a home warranty means an easy solution when it comes to repairs. For any homeowner not covered by a warranty, the process of actually hiring an expert to repair your home can be tedious and involve a long wait. First, you have to call a professional, make an appointment, and then wait a week for them to come and figure out the problem. After they find out what’s wrong, it’s another 2-5 weeks to get new parts, and the cherry on top? A big bill with your name on it that includes consultation, materials, and labor!

- You can select varying levels of coverage based on your home and budget. If your home is on the smaller side and doesn’t have many appliances, then purchasing the highest level of protection possible may not be the best fit for you. Fortunately, the available plans have different levels of coverage and premiums. Go through each coverage plan with your provider and take a look at your house to decide on a custom, specialized plan that works with your budget and the size of your home.

- Warranty plans save money by reducing the amount of unexpected financial setbacks. Since each warranty plan consists of a premium and a flat rate deductible, they are an extremely cost-effective option for any homeowner. Each month, you pay a fair and affordable premium to your warranty company of choice. Then, when something breaks down in your home, your provider sends a thoroughly vetted professional service technician to your home, and the low deductible you have to pay is negligible compared to footing the entire bill out of pocket. When you only have a flat rate to pay, you save thousands of dollars over time by avoiding unexpected costs, especially if you require more than one service visit.

You Should Consider Getting a Warranty Plan

Warranty plans for your home are a wise investment for just about any type of homeowner, but there are a few situations where they are an especially smart decision to make.

For starters, any homeowner who is a first-time buyer or not very skilled at home repair and DIY should seriously consider a warranty for their home. For those that are handy around the house, sure, maybe you can fix the smaller problems, but for extensive system breakdowns like electrical or HVAC, calling an expert to ensure the job is completed correctly and safely is by far the best option.

Another circumstance where a warranty is a necessity is when homes are on the older side with outdated appliances and systems. The older the appliance, the more likely it is to break down from old age and daily use. Not if, but when they break down, they can be very costly to fix, and it can also be difficult to obtain older parts that aren’t sold anymore due to being obsolete or outdated.

As mentioned earlier, if you have limited funds or you’re working on saving money, having the coverage a warranty provides can mean the difference between actually saving money and being broke due to an unexpected bill. Homes and appliances are notoriously expensive to fix, and if you’re trying to save money, not being forced to pay a few thousand dollars on short notice makes a considerable difference in the size of your wallet.

Also, if you’re new to the area and don’t have any connections to contractors or repair-persons, having your established service provider find the reputable service companies that provide the best high-quality service is another great benefit.

Take Advantage of the Comprehensive Coverage a Home Warranty Provides

If you’re a new homeowner or on a limited budget, or even if you want peace of mind knowing your home is protected, then getting a warranty plan for your home is a smart move. As we head into 2021, having comprehensive coverage on your appliances has become a necessity instead of a luxury. Warranties are extremely beneficial, they’re cost-effective, and they give you peace of mind, too.

Paying a low deductible and monthly premium instead of blowing thousands of dollars on parts and labor is a huge benefit for any homeowner no matter the size of their budget. Warranties provide an easy solution to expensive system breakdowns, and if your home has unique needs, you can purchase different levels of coverage that provide the fit you need. Getting the full coverage and reassurance that a warranty plan provides is genuinely a smart investment. Protect your home and your bank account.