These 5 Surprising Facts Could Cost Homeowners Thousands In Repairs If They Aren’t Careful!

Jake Hartman
By Jake Hartman | April 29th, 2021 05:14pm
Jake started TheLlama.com to help connect people with experts in financial services. He contributes to the blog at TheLlama.com.
When do things typically break down?  Answer: When we can least afford to fix them!
When do things typically break down? Answer: When we can least afford to fix them!

 

It’s hard to see it coming. But sooner or later, disasters out of our control can cost us $1,000’s in damages without warning.From natural disasters to home theft or even plain old wear and tear… things break!How we are protected… can make the world of difference in how much we pay out of pocket.Why didn’t Lucy’s Home Insurance cover her $2,300 plumbing fix? But Randal’s Home Warranty did?These are IMPORTANT questions that could save us hundreds or even thousands of dollars each year.

And every plan is different. It’s important to compare your Home Insurance Policy and Home Warranty Policy with the best available prices, or any homeowner could wind up paying $100’s or even $1,000’s more per year than they have to.

1.   What's the Difference: Homeowners Insurance vs. Home Warranty?

Home insurance typically covers homeowners for natural disasters, acts of God and theft. Think flooding, house fire, or burglary. What of the most important things to remember: a home insurance policy can cover the cost of lost home and its belongings during disaster. One of the downsides, is home insurance claims typically last far longer than a home warranty. Losing a home during a natural disaster, could take years to get anything back.

Home Warranty on the other hand, covers homeowner’s for expected repairs and damages. Think a laundry machine or dishwasher breaking, plumbing damage, or even HVAC repair. A Home Warranty can be extremely helpful for immediately getting cash refunds for appliance and home damage quickly. Claims could be refunded in just weeks.

2.   What is typically covered by each policy?

Home Warranties differ in what they offer. It’s important to compare protection plans for their costs. Here is what a Warranty might typically cover:

HVAC

Plumbing

Electric Systems

Heating / Air

Re-Keying

Appliances

Dish Washer

Refrigerator

Laundry and Drier

Stove

Water Heater

Home Insurance can be incredibly valuable during a disaster. Paying a monthly fee might seem terrible, but losing everything might be completely destructive financially. Like Home Warranties, it’s important to shop around and compare the most affordable quotes even if somebody already has home insurance. This could save $1,000’s of dollars.

Fires

Windstorms

Riots

Lightning

Hail

Damage from aircrafts or vehicles

Theft

Vandalism

Floods

Home Insurance often covers:

The house itself

Any other structures on the property

Personal property in home

Additional expenses for being displaced (long term hotels or rentals)

Personal liability

3.   How much does each plan cost?

Home Warranties tend to be far cheaper than home insurance. Prices for a Warranty typically range between $22 and $60 per month. Keep in mind, the low cost is because a warranty often pays to fix and replace damages. 

Home Insurance, on the the other hand, typically costs $35 to $60 per month for every $100,000 of home value. This means a home worth $300,000 is likely to cost between $105 and $180 per month to insure. And these costs are highly dependent on location, risk of disaster, and coverage plans. It’s incredibly important to use a tool like this to compare rates and coverage plans. 

4.   Does each option make sense financially?

Home Warranty: 

Does anybody know how much a homeowner should be spending on repairs? 

Well, Landmark* estimates homeowners spend roughly 1-4% of their entire home’s value on home repairs each year. That doesn’t mean every year this happens. This means every 3 years so much may break or need repair, that the total cost ads up. 

For example, one year, a family might not repair anything. But let’s say an HVAC breaks down… the typical cost to fix or replace this could be $5,000 - $7,000! Think, having a Home Warranty for $30/month, could have replaced all of this at a massive discount or free! In this case, it could save thousands.

For older homeowners, this is be a must have. It’s essential home owners think through any and all fixes a house will need, before writing off Home Warranty. These policies can save thousands and thousands of dollars.

Home Insurance

It’s not everyday disaster strikes. But when it does, home insurance can save a family from bankruptcy or even living on the streets. 

A home insurance policy protects homeowners from loss due to natural events or catastrophic mistakes.

In 2019, natural disasters destroyed $39 Billion of US property! In many cases, homes could have been destroyed entirely, or needed $10,000’s of dollars in repairs, flood damage, mold mitigation.

5.   What are the most common complaints for each service?

Home Warranty: 

A common complaint is that the warranty didn’t cover the right appliances or repairs, leaving home owners to feel frustrated for the money they spent versus the service provided. That’s why it’s incredibly important to shop around. There are hundreds of warranty providers in the US. It’s incredibly important to find a reputable option.

Home Insurance:

Home Insurance gets a lot of complaints the delays in reimbursement for covered losses. Often when a home is destroyed, families need alternative places to live. This often requires temporary living arrangements, which are covered by insurance firms. However, beware: claims could take months or even years (for large disasters) to get reimbursement. Leaving devastated families to fend for themselves until decisions are made. This can put a financial strain on any family. 

In Conclusion

It’s important every homeowner assesses their own financial need and risk before ever selecting a plan. 

It’s important to review coverage before ever making  choice. 

And please, always remember to compare quotes from the most reliable and reputable companies available. Click the buttons below to get compare and match up with multiple quotes from the best providers around.