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People may question them but having a home warranty is something that both buyers and sellers should be thinking about, as it’s something that can protect against expensive, unforeseen repair bills and provide peace of mind for a homeowner.

Choosing a home warranty or not is a decision every buyer will have to make, and just like deciding on any insurance policy, one needs to compare the pros and cons.

A home warranty is basically a contract between a homeowner and a home warranty company that provides discounted repair and replacement service on a home’s major components, such as the furnace, air conditioning, plumbing and electrical system. A home warranty may also cover major appliances.

This can be a nice perk to a potential sale. A seller may offer to purchase one on behalf of a buyer to provide insurance against something happening. If not, the new owner will most likely be presented with a number of solicitations to purchase a home warranty once the sale closes.

Example: You recently bought a home and within the first two months, the air conditioner breaks. If you have a home warranty, you simply file a claim and they, in turn, would find a provider they work with to fix the problem. And if it can’t be repaired and there were no care issues on the part of the new homeowner, the warranty company would be obligated to replace it.

Other things usually covered in a home warranty are a furnace, duct work, ceiling fans, plumbing, telephone wiring, the water heater and even a pool.

If you’re selling a home, having one can protect you in case something happens during the course of the sale—between the showing and the actual contract signing.

Home warranties make sense for people who aren’t too handy or who don’t want to worry about tracking down a contractor when they have a problem. Warranties can also make sense for people with expensive taste in appliances.

A home warranty isn’t too expensive, and many home warranty companies run special sales and either discount policy prices or offer additional coverage. All policies are for a one-year period and can be renewed.

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