People insure many things that are important to them. For instance, most people insure their lives with Life Insurance, their cars with Car Insurance, and their health with Medical Insurance. Unfortunately, one item that is often overlooked but has equal importance is their home, especially what’s inside the home.
Different from Homeowners Insurance, a Home Warranty Plan protects the systems of the home, such as the heating and AC units, water heaters, electrical, plumbing, roofs, pools or spas, appliances and more. It’s no secret that items such as these can be very costly to repair — and potentially replace — if they break down. It’s something that many homeowners will likely have to address during their ownership of a property.
So when things start to break down, as they eventually do, what’s the alternative to spending a lot of money replacing the items that make a home a home?
The answer is a Home Warranty Plan, of course. Homeowners with warranties will only pay a small trade call fee when service is needed, and the item will be repaired at no additional cost. If the item is beyond repair, then the warranty may replace it with a similar model, ultimately saving the homeowner hundreds and even thousands of dollars per year.
Here’s a recent example that involves a younger couple who had just purchased their first home, which was an REO property . . .
After a home inspection came back showing that the property was in excellent condition, and all of the home’s systems were in working order, the couple decided to pass on a Home Warranty Plan. And, since their new purchase was an REO property, the sellers / bank didn’t pay for a warranty plan either, leaving the homeowners completely unprotected.
Approximately two months into their ownership, the AC unit broke down and stopped cooling the home in the peak of the hot season. Subsequently, the new homeowners had to find and call a local HVAC company to schedule service and come out to inspect the AC unit. It was determined that they needed a new condenser; Additionally, their unit was old, and because of the age there were several expenses such as code upgrades and set-up charges associated with getting the new unit compliant. This experience cost the new home owners roughly $1,700. Had they purchased a Home Warranty Plan, this expense would have cost them a $60 trade call fee, and about $100 in AC modifications.
The moral to the story
Insurance is the protection against the unknown. Even if your property passes inspection with flying colors, it doesn’t forecast what will happen tomorrow. Protect your investment, protect your expenses, and protect the unknown.
This blog/website is made available by CRES Insurance Services for educational purposes to give you general information and understanding of legal risks and insurance options, not to provide specific legal advice. This blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Claims examples are for illustrative purposes only. Read your policy for a complete description of what is covered and excluded.
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