In a very small period of time, home protection plan has grown considerably in popularity. These plans are home service agreements that provide repair services and/or replacement of the main mechanical systems and appliances in your house.
How a home Protection plan works?
A home protection plan works similar to any other insurance policy. Every year if you want to be insured under the warranty, you pay a yearly premium. This can vary anywhere from a few hundred bucks to a thousand dollars, depending on the area of your home. Generally, house of up to 5,000 feet in size are covered under the standard warranty. Above that, you have to pay for additional coverage.
When covered appliances damaged, you’ll file a claim with your home insurance firm. Most organizations provide 24/7 customer service, both online or over the phone, and many promise next-day service for major issues. The service provider will communicate with you to finalize an appointment with their mechanic. The engineer will come to your place to identify and fix the problem based on your coverage and what’s approved by your home warranty provider.
How Will You Identify If You Require a Home Protection Plan?
Your home is one of the biggest purchases you’ll make, so any extra protections you can take to save your investment is beneficial. When deciding if a home warranty plan is right for you, here are some basic questions to ask before purchasing a plan:
- Can you afford to buy a home warranty? If a plan fits into your budget, it may be a worthwhile investment in order to avoid financial stress in the future.
- Are you a first-time home buyer? Spending a little bit more each month will help them save thousands of dollars in the long run. Buying a home is stressful enough, so invest in your peace of mind.
- Do you own or plan to purchase a resale home? Buying a plan on the 10th birthday of your home is a sensible investment to support you with future expenses.
- Do you own a small home? Home warranty policies also applicable to small homes or mobile houses. Even if you’ve invest some small amount, it’s still wise to guard it.
- Do you have a property on rent? You can lump the cost of the plan into your tenants’ monthly rental fee. This is a wise decision if you have renters like college students.
The benefits of a home warranty
The huge advantage to a complete home protection plan is peace of mind. Moreover, it can be a smart money move for people who need to spend wisely or just like to be ahead of the game with their monetary planning. With a protection plan, there are less unexpected costs. You’ll know what your premium costs upfront and you’ll know what your deductible is for any repairs that are covered under the warranty, making it much easier to handle the unexpected.
You can save you money on costly repairs, particularly on older appliances. If that additional guarantee is valuable for you, you may appreciate the benefits of having a home plans.
The drawbacks of a home warranty
The clear disadvantage of the home protection plan is that not everything is protected. You’ll need to check over the exact TnC of your plan to get to know the individual omissions.
Another problem for few people is that every year service cost is paid upfront under the assumption that repairs will may be need to be made. However, that may or may not be the situation. For years, everything may work well, but you’ll have paid the installments, regardless.
Bottom line: A plan that works for a home built five years ago may not be a good fit for a 20-year-old home, so it’s important to truly know your protection plan you’re choosing and how it will work with your house requirements.