We always purchase warranties for new appliances or cars, so why not purchase a warranty when buying a home? Whether you buy a new house or an old one, things can break down. Replacing appliances can cost you thousands of dollars and with today’s economy, it’s difficult to bounce back from those kinds of expenses. As a realtor in Brampton, I always recommend my clients get a home warranty. Here’s a guide on a home warranty, including a rough estimate of the cost and what is included in one.
What is a home warranty?
A home warranty is a service agreement that lasts for a year and protects new homeowners against potential home expenses including appliance replacement and house structure maintenance. You can choose to renew it every 12 months. You can purchase a home warranty at any time after purchasing one, but it’s best to purchase right after closing.
Do I need to get a home warranty?
In some provinces in Canada including Alberta, British Columbia, Ontario, and Quebec, home builders provide a third-party home warranty. They are required to since builders are members of the Canadian Home Builders’ Association.
When selling homes, the home seller might choose to provide a home warranty to entice a quick sale. In today’s competitive market, most homes are sold on an unconditional offer. Offering a home warranty helps encourage the right buyer.
What is the cost of a home warranty in Brampton? What do they cover?
A home warranty in Brampton costs $300 to $600 yearly depending on the size of your house. The monthly cost would vary between $25 to $50.
Home warranty in Brampton covers:
A home warranty usually covers large appliances only but you can add more coverage including swimming pools or saunas. When buying a new home, ask the builder for the document and sign only after reading it.
Not all home warranty providers cover appliances, so check with the company. If you choose to cover home appliances, the policy should typically cover fridges, stoves, washers, dryers, dishwashers, and microwaves.
Electric, HVAC, and plumbing
I highly recommend getting a combo plan that covers all these systems and appliances. Your warranty provider in Brampton should be able to customize the policy depending on your requirements.
Add-on coverage includes pools, saunas, hot tubs, or specific appliances including power tools.
What is the difference between a home warranty and home insurance in Canada?
A home insurance policy covers comprehensive losses and can also cover personal liability issues. For example, theft and damage due to water leakage or fires.
Both, a home warranty and home insurance, are home protection plans. Buying both plans is optional. However, if you’re putting less than 20% down payment towards your house, it’s compulsory to purchase home insurance in Canada. Once you have 20% or higher equity, you can choose to end the home insurance policy.
Do I need both?
Short answer – YES! Long answer – it’s a good idea to get both policies but sometimes certain coverages overlap. However, a home warranty policy doesn’t protect you against theft, break-ins, or personal liability. Work with a provider who can provide you with both policies together, so you enjoy peace of mind.
For more real estate tips and guidance, visit my website – Realtor Catherine Nacar.