If you are like many new home buyers, you are probably asking yourself, “What is home warranty insurance and why should I have it?” Many people believe that their homeowner’s insurance is sufficient protection from unexpected expenses.
Unfortunately, this is simply not the case. There are many features of the home to consider and even more circumstances where your homeowner’s insurance just doesn’t cover it.
First of all, the best home warranty companies cover the breakage of many major systems in the home. Appliance insurance is also an added coverage of a home warranty. A standard homeowner’s warranty insurance package will include most major appliances, such as kitchen and laundry. Also, major systems, including heating and cooling, and water heaters should be covered.
In addition to mechanical systems and appliances, you can purchase coverage for your roof, electrical systems, gas fireplaces, hot tubs, pools, septic, and well pumps, to name a few. You can work with a home warranty insurance company to get coverage for all of the things around your home that you deem necessary.
If you have some appliances that are new and it is unlikely they will break or they are already covered under a manufacturer’s warranty, you probably don’t want to waste money covering these items. However, as systems around your home age, it is wise to get coverage for them in the event that they stop working.
Some homebuyers may think the type of residential property they are purchasing may not be eligible for homeowner’s warranty insurance, like a duplex or other multi-family unit. And if these people are buying for the purpose of renting out, they may think that the renter’s insurance will cover everything.
However, this assumption could not be more inaccurate. If you are thinking about becoming a landlord, you will be required to provide many or most of the appliances and are responsible for all repairs on the home, unless expressly caused by the tenant. Normal wear and tear, aging appliances and major household systems are the most likely situations that you will face and need to address as a landlord. So, being covered by home warranty insurance is the smartest thing you can do for your investment property.