What is a Home Protection Plan?
A Home Protection Plan, also known as a Home Warranty, is a service contract that covers the repair or replacement of major home systems and appliances. This type of plan provides homeowners with peace of mind, knowing that if something goes wrong with their home systems or appliances, they can have them repaired or replaced without a large out-of-pocket expense.
Why Should You Get One?
A Home Protection Plan can be a valuable investment, especially for new homeowners who may not have the funds to cover unexpected repairs. It can provide added protection and peace of mind to buyers who may be hesitant about purchasing an older home or worried about unexpected repair costs. Offering a Home Protection Plan to potential buyers can also be a significant selling point if you're selling your home.
Who Handles the Repairs?
When something covered under your Home Protection Plan breaks down, you can contact your warranty provider to request a repair or replacement. The provider will then send out a qualified service technician to diagnose and fix the problem. Depending on the provider, you may be required to pay a service call fee for each repair visit.
How Does a Home Protection Plan Differ from Homeowner's Insurance?
Homeowner's Insurance provides protection against unexpected events like fire, theft, and natural disasters. In contrast, a Home Protection Plan covers the repair or replacement of major home systems and appliances due to normal wear and tear. Homeowner's Insurance is typically required by lenders, while a Home Protection Plan is optional but can provide added protection for homeowners.
Who Pays for a Home Protection Plan?
The cost of a Home Protection Plan can be paid by either the buyer or seller during the transaction. However, it's important to note that a Home Protection Plan is sometimes referred to as a Home Warranty, which can be misleading because it does not warrant that systems won't fail. Instead, it provides coverage for the repair or replacement of covered items.
Is a Home Protection Plan Worth the Cost?
The cost of a Home Protection Plan varies depending on the level of coverage and the provider selected. While a Home Protection Plan may have upfront costs, it can save you money in the long run by covering unexpected repairs and replacements. It's important to review the terms and conditions of your plan carefully to ensure you understand what is and isn't covered.
Limitations and Exclusions
It's important to note that there are limitations and exclusions to what a Home Protection Plan covers. For example, some plans may exclude pre-existing conditions or only cover certain types of home systems and appliances. Be sure to review the terms and conditions of your plan carefully to ensure you understand what is and isn't covered.
