When deciding whether to purchase a home warranty, it is important to understand what factors influence the cost. The size of your home, the age of your home, and the type of warranty you purchase are all factors that can affect the amount of money you’ll need to pay for your home warranty.
Your home is likely your most valuable asset, so it’s important to protect it. A home warranty can help cover the cost of repairs or replacements for major systems and appliances. But what factors influence the home warranty cost? Keep reading to find out.
Your location is a big factor in home warranty costs. Generally, the cost of a home warranty increases as you move further away from large metropolitan areas. This is because there are more service providers in larger cities, and they can offer more competitive rates. Another reason for the higher cost of warranties in rural areas is that there is less competition among providers, so companies can charge more without losing customers.
Homes in areas with high crime rates or severe weather conditions are likely to cost more for a warranty than homes in safer areas. This is because these homes are more susceptible to damages, which can raise the cost of a home warranty plan.
The Age of Your Home
The age of your home is one factor that insurance companies use to determine home warranty costs. The older a home is, the more likely it is to experience a covered claim. Many companies offer discounts for homes that are less than 10 years old, as these homes are considered low-risk. As a home age, the risk of a covered claim increases, and premiums usually reflect this increase.
On the other hand, even brand-new homes can be expensive to insure; this is because builders often exclude major systems like the roof and HVAC from their standard warranties. In other words, the level of helpfulness your home warranty provides for your new home depends on how willing you are to pay for an expensive plan.
The Size of The Home
The size and features of a home can also affect its warranty cost. A large, luxurious home will be more expensive to insure than a smaller one. And finally, the type of coverage purchased can also influence the price. A policy that includes more coverage will be more expensive than one with fewer bells and whistles.
On the other hand, a fixer-upper home may require a more expensive home warranty plan because of all the damages and the list of systems that you may need to buy/repair. A new home can come with a lower monthly cost if it requires fewer repairs and items that already come with a manufacturer’s warranty.
The Cost of the Plan
Home warranties don’t tend to be extremely expensive overall. Basic plans usually cover only system failures, while comprehensive plans also cover routine maintenance and repairs. The more comprehensive your policy, the higher your premium will be.
The average cost for a home warranty is $450 per year, but they can range from as little as $200 to more than $1,000. The price you pay depends on the size and age of your home, the type of coverage you choose, and the company you buy from.
When you are buying or selling a home, one of the things you will need to consider is whether or not to purchase a home warranty. Home warranties are insurance policies that cover the repair or replacement of home systems and appliances. They can be a great way to protect yourself against unexpected repairs, but they do have some limitations.