With more and more retirees choosing to remain in their homes and age in place, one reality to consider is the cost of home repairs. Let’s face it – as we get older, our home ages right along with us, and at some point things will break down. A home warranty is a service plan that offers discounted repair and replacement services for home appliances and systems covered by your purchased plan.
What Do Home Warranties Usually Cover?
Home Warranty contract terms vary and the scope of coverage depends on the type of warranty you choose. You may have to add optional coverage for certain types of appliances as identified below.
Systems covered usually include:
- Electrical
- Ductwork
- Heating
- Interior plumbing
- Water heater
Appliances covered usually include:
- Air conditioning (sometimes optional)
- Dishwasher
- Garage door opener
- Garbage disposal
- Pool equipment (optional)
- Oven, range, or stovetop
- Refrigerator (sometimes optional, may exclude ice maker)
- Spa equipment (optional)
“Typically, structural features of a home like windows, solar panels, walls, and foundations are excluded.”
What Do Home Warranties Usually Exclude?
Many home warranty companies exclude pre-existing issues and establish a 30-day waiting period before warranty protection starts. Typically, structural features of a home like windows, solar panels, walls, and foundations are excluded. And then there are other exclusions that are usually identified by a home inspector:
- Commercial kitchen appliances and systems
- Improper installation
- Maintenance issues or neglect (rust, corrosion, and sediment)
- Mismatched systems (indoor and outdoor units that aren’t meant to work together)
- Secondary damage resulting from appliance or system failure
Is There A Cost Limit On How Much The Warranty Will Pay?
The short answer – yes. Home warranty companies set limits on what they’ll pay for the repair or replacement of covered systems and appliances. Some companies itemize how much they’ll pay for certain repairs, for example: $500 for a garage door opener or $1,000 for a built-in microwave. While other companies provide a set fee for all appliances.
How Much Do Home Warranties Cost?
On average, standard home warranties cost approximately $600 per year. Of course, the cost will be higher if you add optional coverage. In addition to the monthly plan payments, there are usually service fees. (a.k.a. deductibles) for each repair which can range from $50 to $125. When you consider the cost of high-priced repairs, even when you include the service fee, your home warranty plan will quickly pay for itself. Make sure you do your research and compare different home warranty companies before choosing a plan.
