Should you buy a home warranty?

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Real Estate

In our current seller's market, buyers are offering top dollar for homes and waiving inspections just to get a seller to look at their offers. You may want to consider a home warranty to help protect your savings account when one or more of your appliances fail. 


Appliance Junkie? Why You Should Have a Home Warranty

You probably rely on appliances every day for cooking, cleaning, and staying warm or cool. It’s nice to have these modern conveniences to make your life easier and more comfortable. Like anything else you buy, your appliances will eventually wear down and stop working properly. Their life span is limiting, so the time will come when you’ll need to make repairs or even replace the items. This can get expensive, especially if multiple items have problems at the same time. The costliest issues can be a financial burden and leave you in a difficult position. What can you do if you don’t have the money to pay for these services? This is when a home warranty specifically for home appliances can come to your rescue. These plans can provide peace of mind and save you from a financial burden.


What Is a Home Warranty? 

Unlike a homeowner’s insurance policy, which is required to secure a mortgage loan, a home warranty is an auxiliary purchase. It covers repairs and replacements of appliances and systems in your home that deteriorate due to wear and tear or stop working suddenly and unexpectedly. You sign an agreement with a company to pay an annual or monthly fee. In exchange, the company will send a service technician to your home to assess the repair needs. You will pay a service fee but no other out-of-pocket costs. Home warranties last a year, at which time you can renew the plan. Warranties cost around $500 annually.


The Lifespan of Appliances 

Different appliances will perform well for varying amounts of time. You can expect many years of good performance from some items, while others may begin to sputter and flatter after just a few. On the short end, some dishwashers and microwaves will begin to wear out after four or five years. Other appliances such as ranges and refrigerators may have up to a 15-year lifespan. In between these two extremes are items such as washers, dryers, and water heaters, which may do their jobs effectively for around a decade. Bear in mind that these figures can vary depending on the brands you purchase, how well you take care of them, and how often you use the appliances.


The Cost to Fix Appliances 

When things start to go wrong with an appliance, you may first try to tinker with it yourself. If you aren’t sure what to do, or if your efforts are unsuccessful, you’ll probably call a professional. In addition to paying a service fee, you can expect to pay hourly rates of anywhere between $50 and $150 an hour. On top of this, you’ll have to pay for the parts and components to get the appliance up and running again. Depending on the issue and the complexity of it, you can spend hundreds to fix some appliances. Other items, such as the furnace, air conditioner, or water heater, may cost close to or more than $1,000.


The Cost to Replace Appliances 

If an appliance is in such despair that no repair job will be enough to make it serviceable, you’ll have to replace it. The cost to install new appliances is different with each item. Lower-end dishwashers may cost $250 or $300, but higher-quality models can be well over $1,000. A new refrigerator can be lower than $1,000, but bigger options with stainless steel construction and ice makers can approach as much as $5,000. Water heaters can average around $1,000 but can be much higher. Other useful appliances, such as washers, dryers, stoves, and ovens, can all cost more than $1,000.


Saving Money With a Home Warranty 

If it pains you to think about what you would do if one of your appliances suddenly breaks down, it may be the right time to buy a home warranty. These plans can save you a significant amount of money when much-needed appliances falter. Instead of paying several hundred or even more than $1,000 to fix or replace these items, you can pay around $50 a month for a home warranty. You can then rest assured knowing that repairs and new installations won’t cost you a fortune. 

A home warranty is especially important to have if the repairs are expensive and if multiple appliances start having problems at once. Spending a little bit now for a warranty can spare you a lot of stress and grief later on. Purchasing a home warranty is a good way to protect yourself financially unless you have brand-new appliances that come with their own manufacturer warranty.