Home warranty pros and cons

U.S. & World

(NBC) – The housing market remains mighty active, but new homeowners are still struggling with another big decision that’s usually made right around the time they move in.

Buying a home is big leap all by itself, but now you have to decide how to protect your investment and how to repair or replace what traditional homeowners insurance won’t cover.

That’s what these home warranty policies are all about.

“You can buy one for a single appliance, you can buy them for all the appliances in your home plus your plumbing and electrical systems,” said Chief Money Editor Margot Gilman at Consumer Reports.

They advise readers to first decide whether you even need a policy, which generally costs about a thousand dollars a year.

“So a smart alternative might be to take that $1000 a year and put it into a dedicated savings account; then it’s there for you if you need it, if something breaks, and it’s there for you if nothing breaks and you can it for a vacation!” said Gilman.

If you really want one, though, she says do your research and ask the right questions.

“About what is included and what is not included – how a repair gets done. All of these things can turn out to be really big headaches down the road that can be worth knowing about in advance before you lay out the money,” she said.

She also says there can be big differences in what home warranties cover, even one that covers a refrigerator’s condenser but not the ice maker.

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