Understanding the ins and outs of home warranties and how it differs from insurance

When it comes to genuinely understanding home warranties, it is fair to say that it can be confusing, to say the least, to unwind and understand it all. First and foremost, the decision to buy a home is one that comes with certain responsibilities. One of the most fundamentally important responsibilities is obviously taking adequate care of that home. While obviously taking care of a property is a necessity for keeping that property appealing and liveable, it is also about maintaining its value.

You also want to make sure that your home is insured in case of any disasters as real estate comes with a hefty price and if that building is damaged, the damages to your bank account would also be substantial. Just think about it: you will have to pay to fix your home, you will have to find a new place to stay while it’s being fixed, and all that adds up. So, before you go purchase just any home warranty from an agent or insurance broker, you must first understand the advantages of home warranties, and why they are worth the investment.

A home warranty is different than home insurance

This is extremely important. Home insurance is designed to protect you financially in the event of unforeseen damage to your home (think natural disasters, for example), while on the other hand, a home warranty is essentially a policy that protects the major appliances and systems of your home as they age. The intent of a home warranty is to offer support and save you money and time when appliances like the dishwasher or the water heater break unexpectedly, or experience other functional issues. So, rather than protecting your home itself, a home warranty seeks to help bridge the gap when appliances within that home go awry or otherwise unseemly.

So it is not wise to skimp on either. If anything, it is important that you invest both in home insurance and in-home warranty so as to keep your property a secure investment. It is a financially wise decision, so if you are able to afford both, it is definitely something worth considering.

How a home warranty works

Just like any other insurance policy, a home warranty is paid in installments (most often in the form of an annual premium). The size of your home ultimately determines the cost of your cover, and each time an object within your home breaks, you then pay a deductible. The exact cost of that deductible (just as is the case with the home warranty itself) depends on the terms of the warranty you choose. In exchange for the deductible paid, the warranty company sends out a service to make the necessary repairs, even replacing the damaged or broken appliance if necessary. Basically, what you are looking for are home warranties for investment protection. From your tv to your fridge (all of which are not cheap electronics), you can make sure that your appliances remain top-notch and in pristine working order.

The peace of mind benefit

At the end of the day, the biggest and most important advantage of a home warranty is ultimately the peace of mind it affords you. In investing in a home warranty, you are reassured that if an appliance or another object within your home that is covered malfunctions, a professional will come out and fix it, no questions asked. Home warranties are especially handy, in this case, for those that are not especially gifted at fixing things when they start to break, or someone that has little time to be meddling around with such things.

It is also about convenience. In our digital age of instant gratification, it can be seen as a pesky nuisance when you have to figure out what number to call, which mechanic to look for, and even sourcing a mechanic can be annoying because you do not know which one to choose and your friends do not have a reliable contact. With home warranties, you can just sit back and relax, because there’s just one number you need to call: your warranty provider.

Furthermore, you know what your cost is upfront, which means there are little to no unforeseen costs hiding around the corner, and you know you will be well taken care of in the event that something does go wrong. More than anything, a home warranty is a peace of mind policy, complete with all the trimmings and fancy toppings you could possibly want.

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