Homeowners know budgeting helps them prepare for unexpected costs. Like most homeowners, you have a monthly budget for expenses like your mortgage, utilities, cell phone, and homeowners insurance. But did you include home warranty costs in your budgeting?
Having a home warranty is a smart way to help protect your budget from expensive appliance and home system repairs. So even if you paid for your home warranty during your home purchase, or received it as a gift from your agent or the seller, it helps to include your coverage in budget planning, especially for year two and beyond.
Budgeting for Home Warranty Costs
Similar to your homeowner’s insurance, when you pay for home warranty coverage you can set up monthly or yearly billing. Either way, if you include home warranty costs in your budget planning you get a helpful monthly reminder that you’re protected any time you have a problem with a covered item. Those reminders also can be important for new homeowners with a lot on their plate and savings accounts that need rebuilding.
Let’s say you notice an issue with your garbage disposal a few months after moving into your home. A small problem with the garbage disposal could eventually lead to water leaking under the kitchen sink. That reminder about your home warranty coverage means as soon as you notice a problem, you simply go online 24/7 to request service. You don’t have to wait for a problem with a covered item to get worse. And service requests are unlimited.
Service Fees
Another reason to include home warranty costs in your budgeting is so you can plan for any service fees. When you request service for a covered item like the garbage disposal, you’ll pay a service fee for the technician’s first visit. Review your home warranty contract for the amount you’ll need and plan to save for at least one service fee per year. Last year, more than half of our first-year customers placed at least one service request. So there’s a good chance you’ll need service at some point, too.
Non-Covered Costs
When covered items break, your home warranty protects you from repair or replacement costs. Sometimes, when a system or appliance needs to be repaired or replaced, your home warranty may not cover everything. For example, home warranties typically don't cover some modifications or changes required when new equipment gets installed.
Let’s say you need a new water heater, and the pipes coming in and out of the unit need to be modified. A home warranty usually will not cover modifications. If this happens, you may incur some additional expense. It’s a good idea to set aside a bit extra each month so you have funds available no matter what may happen. And building up your savings can help you cover for any potential unexpected home maintenance costs that homeowners can face.
Even though you are saving each month for unexpected expenses, keep in mind that you are also saving potentially thousands of dollars when compared to what homeowners without home warranty coverage would have to pay for the same repair or replacement. Take a look at these estimated repair and replacement costs to see how your home warranty coverage helps protect your budget.
When It’s Time to Renew Your Home Warranty
Did you know that your home warranty is renewable? If your home warranty coverage began when you bought your house, it will come up for renewal on the anniversary of your home purchase.
Including the home warranty renewal cost in your budget at the right time during the year makes good financial sense. When your renewal time arrives, you can take advantage of the monthly payment option that many of our customers enjoy. Of course, there is always the annual pay option available, if you prefer.
Have questions about renewal? Give us a call anytime or sign-in to the Homeowner Center to find out more.
