Should You Buy a Home Warranty When You Move?

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Should you buy a home warranty when you move? For many buyers, home warranties offer peace of mind when it comes to budgeting for home expenses. For others, home warranties are simply a waste of money. Whether or not you need to purchase a home warranty depends on your specific needs, finances and the condition of your new home. Fortunately, we’re here to help. To make your decision easier, we’ve included information on what home warranties are good for (and what they’re not) as well as the types of homeowners who should and should not consider purchasing one.

What is a home warranty?

So what is a home warranty, anyway? It’s essentially a single protection plan that homeowners can purchase to cover the cost of repairs and replacing of appliances and systems in their homes. Basically, think of it as insurance for your home appliances. However, unlike homeowners insurance, home warranties only cover basic appliances and features, while insurance covers big-ticket items such as the structure of your home and personal household belongings. Typically, insurance also requires a major event such as a fire, flood or burglary to take place in order to receive compensation for items, whereas home warranties may only require general wear and tear or malfunction of an appliance. For information about the cost of home warranties, check here.

What does a home warranty cover?

Practically every homeowner will experience problems from time to time with appliances and home features. After all, who hasn’t had a dishwasher or refrigerator break down at least once in their lives? Fortunately, this is where home warranties can help. Having a home warranty ensures that if your appliance breaks or become damaged, a service professional will come to your home to repair or replace the item. Since you’ve already purchased a home warranty, the only thing you’ll likely end up paying for is the small service fee. On the other hand, those who do not have a home warranty will need to pay out of pocket for any replacements or repairs. Home warranties typically cover:

• Plumbing systems
• HVAC units
• Electrical systems
• Washing machines and dryers
• Garbage disposal
• Ovens and stovetops
• Dishwashers
• Refrigerators and freezers
• Water heaters

What to do before you move 

• Read up on what a home warranty actually covers – Debating whether or not to purchase a home warranty? First, read up on what a home warranty does and does not cover. Most home warranties cover the cost of repairing or replacing a number of home appliances and systems within the home including the ones listed above. Certain providers may also give customers the option to add extra home features such as a swimming pool to their home warranty plan. Be sure to research different providers and their offerings before committing to a home warranty plan.
• Ask the seller about existing home warranties– Do the sellers have a home warranty already? Do they have individual manufacturer warranties for different appliances? Make sure to ask the sellers these questions when purchasing a home. The sellers may even offer to pay for all or part of the buyer’s home warranty during the first year.
• Have an inspector get a good look at the home’s appliances and features – Under contract and preparing to purchase a home? Be sure that the inspector who oversees your official home inspection gets a good look at the appliances and systems. Your inspector should be able to give you a full assessment of the condition of these items. This should make it easier to decide whether or not you need a home warranty. For instance, if an appliance is on its last legs, it’s probably a good idea to purchase a home warranty and/or ask the seller to handle the repairs prior to closing.

Home warranties are ideal for:

• Those moving to an older home or one with outdated appliances – Home warranties are ideal for those moving to an older home or one with outdated appliances. After all, with older homes, it’s just a matter of time before something breaks down (and trust us, it will!). So save yourself the headaches, frustration and expense by buying a home warranty when moving.
• Those who are risk averse – Does the thought of a broken fridge keep you up at night? If you’re one of those people who simply needs the peace of mind that a home warranty provides, we strongly suggest purchasing one when you move.
• Those who are not financially prepared to make a large, out of pocket expense – Of course, new appliances don’t come cheap. In fact, refrigerators, washing machines, dishwashers and other big-ticket appliances can set you back a few thousand dollars. Unless you’re financially prepared to replace these items at the drop of a hat, it may be a good idea to purchase a home warranty.

Home warranties are not ideal for:

• Those moving to a new home or one with updated appliances – Moving to a new construction home? You likely won’t need to bother purchasing a home warranty. Most new home features and systems should work without the need of repairs or replacements for several years. In addition, these newer appliances should still be covered under manufacturer warranties, which are usually good for up to several years.
• Those who already have individual manufacturer warranties on appliances – Does the seller have manufacturer warranties for certain appliances? If these household items are already covered under an individual warranty, then there’s likely no need to purchase a larger umbrella home warranty policy, unless you’re worried about plumbing, electrical and other big ticket items breaking down.

What to do with your warranty information

If the seller passes along their manufacturer warranty or home warranty information to you, be sure to store all paperwork and receipts in an easy-to-find file folder and/or home binder.