When you buy your first home, you’ll have a lot of questions. Your three questions are typically:
1). Where do you want to live?
2). How big of a house do you need?
3). What can you afford?
And then the process begins of getting qualified for a loan and house shopping. Once you find a house to make your home, more questions start, but one subject that most first-time buyers do not think about is the home warranty.
What Is A Home Warranty Exactly?
The home warranty provides you peace of mind with a level of protection for major home repairs. Those major repairs become major expensive and this warranty will cover those expenses, minus a small service call fee. This is a service contract that repairs or replaces your appliances and systems within the home that break under normal use when they have been properly maintained. i.e. changing the air filter in your HVAC system, monitoring the weather to protect pipes during winter months, etc.
Homeowners Insurance vs Home Warranty
A common confusion about a home warranty coverage for first time home buyers is thinking that their homeowner’s insurance is the same thing. While they sound like they are, they each have different coverage.
Your homeowner’s insurance policy will cover fire, theft, and other catastrophic events such as a guest getting injured in your home. A home warranty will cover your household appliances and/or systems such as the dishwasher, HVAC system, washing machine and dryer, the things that are used daily and break during normal use.
What Is Covered In a Home Warranty Plan?
The home warranty options for first-time buyers is important, regardless if you are buying a previously owned home or a brand-new home. It is difficult to grasp the expense of repairing or replacing things like the electrical wiring or plumbing if you’ve never dealt with it before, which most first-time buyers haven’t.
You may not realize the expense of replacing your HVAC system, dishwasher or even the garage door opener. These are things that do not last forever and will need to be repaired or replaced at some point and if you’re buying an older home the first time, a warranty plan is a budget saver. Even if the seller has replaced all those major things within the last two to three years. Things will break – this is a given with homeownership.
If you’re buying a brand new, never occupied home, builders typically include a home warranty for new homes, much like you get when you purchase a new appliance separately. This is already built into the price of the home. It is always recommended to review the warranty plan that comes with the house and make sure you’re covered on all the major appliances and systems and for how long. Usually, coverage is for one year so you’ll want to be sure to purchase a new home warranty plan before the original one expires to keep that coverage consistent.
When it comes to a previously occupied/owned home, the question of who pays for the home warranty is one you need to verify before completing the deal. It is standard for one year of home warranty to be covered by the seller.
In a competitive bid situation, the buyer may offer to forgo that perk so make their bid more appealing to the seller. If that is the case, the buyer can buy a home warranty plan separately on their own. Another home inspection for home warranty will be required by the home warranty company you choose to go with, or they may use the same inspection that was done for the mortgage company.
What Is Differ About The Homeowner’s Insurance?
Your homeowner’s insurance will usually be built into your mortgage along with taxes. The coverage this insurance provides is for incidents such as fire, storms, theft, and other major catastrophes, including anyone that is hurt on your property like falling down the stairs. Homeowner’s insurance covers repair or replacing your roof after a hail or wind storm. Your homeowner’s insurance will often have coverage for theft and your own injuries off your property as well, like your hotel room being robbed while on vacation.
Home warranty coverage for first time home buyers is a way to not be blindsided with the expense of repairing or replacing major appliances and systems out-of-pocket and unexpectedly. The average wear and tear of these things slowly start to break down your appliances and systems like electrical and plumbing.
When the water heater goes out, it is often at one of the most inopportune times. Not everyone has a budget that can afford the sudden cost of a new water heater. While homeowner’s insurance and home warranty are complementary of each other, there is no overlap coverage between the two policies. Homeowner’s insurance is a must when financing. Home Warranty is an additional peace of mind.
At Your Service
Liberty Home Guard customer service is at your disposal 24/7 to answer questions, provide information and quotes on the various policies we offer. Or we can discuss a customized policy that better suits your needs and budget. We also offer home warranty for rental property, providing a peace of mind for both the owner and the tenant.