How a home warranty can save you money

Most of us know only too well how costly it is to fix the major appliances around the home when they break down - washing machine, fridge and stove for example. And it's even more expensive when it comes to repairing or replacing the heating and air systems in your home. A home warranty can potentially save you a lot of money - and it can also make it easier to sell your home.

If you are a homeowner and are thinking of taking out a home warranty, compare the cost of a typical warranty against the cost of repairing or replacing one or more of your major systems or appliances. Over the course of several years, the average homeowner will generally need to repair or replace one or more of the things normally covered by a home warranty.

Without a home warranty, the average homeowner will pay between $80 and $500 to repair their fridge and from $500 to $2000 to replace it. The average home heating system today can cost from $100 to $600 to repair - and anywhere from $1200 to $3800 to replace. There is often a charge just to call the repairman out - before any work is even done.

However, the costliest item in most homes is the central air system. The average cost to repair the central air system is between $200 and $1100 - and to replace it completely can cost up to $4200. A common problem in many older townhomes and condos is that the air conditioning system is as old as the property - up to 30 years - and has just about reached the end of its natural life.

And many parts of the country have seen temperatures close to 100 degrees over the last few months. Most of us would agree that the air conditioning system is one system we don't want breaking down - or having to wait several days for someone to come and fix it.

Many home warranties will also cover “extras” such as a garage door opener, garbage disposal and ceiling fans - useful for those of us who are clueless when it comes to basic electrical work. And if you have older appliances, don't despair - a big advantage of a home warranty is that it can be purchased for almost any home - regardless of the home's age or the age of the appliances.

In fact, one study found that the cost of maintaining a home to current standards for 30 years is almost four times the original cost of the home. And buying a newer home often doesn't make a big difference when it comes to repair and maintenance costs - the National Association of Home Builders suggests that general upkeep on a house built in 1990 is only about one third less expensive than for a pre-1960 home.

A home warranty that includes every major appliance may be less expensive - and also easier to keep track of - than having different warranties and guarantees for each appliance. It's also easy to extend the warranty beyond the year - the warranty company will generally send you a reminder once you are close to the expiration date. The risk of losing track of the expiration date - and incurring costly repairs - is minimized by taking out a home warranty.

If you have a home warranty, you have less phone numbers to keep track of - and just one phone number to call when something goes wrong. Service is generally provided 24 hours a day, 365 days of the year ensuring a minimum of waiting time before repairs are carried out. A typical callout charge is around $50.

If you are in the market for a home warranty, it can pay to shop around. Companies sometimes offer discount policy prices or provide additional coverage for the same price. If you are a buyer, many real estate agents will also offer a home warranty as a gift at the time of closing. The internet has also made it easy to compare products and purchase a warranty on line.

When choosing a home warranty, you can also save money by choosing your level of coverage carefully and reading the small print. Not all warranties are equal - some do or don't cover your fridge and dishwasher. If you have a newer home or newer appliances, you may not need as much coverage. And an estimated one in five new homes comes with a home warranty anyway.

And the average cost of a typical home warranty? The cost is generally between $350 and $600 per year, depending on the level of coverage - making it an affordable and appealing option for both home buyers and sellers.

Craig Elliott is a freelance writer frequently writing about home warranty | home warranties