There are several protection options available for home buyers. This includes things like home inspections, insurance, warranties, and appraisals. The problem is that choosing the correct option is sometimes something difficult to do, especially when you do not know the differences between them.
The short version that explains these options is:
- Home Appraisals – These are mostly going to protect the bank so it does not loan more money that is needed for the purchase of the property. Private property appraisers analyze market factors and the actual property to determine the right value. Learn more about home appraisals.
- Home Insurance – This is going to protect the owner of the home from a financial loss resulting from accidents or natural disasters. For instance, when an unexpected house fire happens, you receive money to cover repairs. Some policies even cover hotel fees.
The home insurance will not cover the appliances and mechanicals of the home from wear and tear. This is where the home warranty steps in since this is what it will cover.
To give you an example, when a tree falls on your heater and damages it, the home insurance policy will cover the repairs. If the water heater stops working because of wear and tear, it is the home warranty policy that will protect it.
As you can see, budgeting for home buying or even home remodeling can be difficult with all these options in place. This is especially the case since there is also a builder’s warranty we have to highlight.
Builder’s Warranty
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New construction buyers have access to this type of warranty. It is offered by the builder and activates after the home is finished. Usually, this is a policy that offers coverage for 2 years. What is covered is the workmanship and the materials used by the builder. Structural issues are normally covered for up to ten years.
As with home insurance, this warranty will not cover your home appliances. So, when your oven stops working, you do not get compensation.
Home Warranty For New Constructions
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When you buy a home that is already built, it is obvious you should take full advantage of home warranty policies. You can find some great options through Cinch.com reviews. But, what if we are talking about a new construction?
At its core, the home warranty is going to add extra coverage to your investments because of the fact that the home appliances will be covered. This is really important since home insurance and builder’s warranty do not offer this. But, is it a good financial investment to make at the end of the day?
The truth is that the answer is “it depends”. The best thing to do is to simply do the math. See how much the home warranty costs you. Then, see how much the laundry and kitchen appliances cost. When the cost of replacement or repair is higher for the appliance than the cost of the warranty, the investment is definitely one you should consider making. Just remember that the warranty company will insist on first trying to repair the damaged home appliance. Only when an item is irreparable will the costs for a brand new one be offered.
