UNITED STATES—If you’re a homeowner, you know all too well that maintenance and upkeep are essential to keeping your house looking nice and feeling comfortable and safe. There always seems to be work to do and new projects to start. Home improvements may also include repairing appliances and systems or even replacing them when they wear out and falter. The financial commitment can be significant—even overwhelming at times. After all, it can put a strain on your budget to take care of these repairs, especially when they happen unexpectedly. A home warranty plan can eliminate this stress and provide you with the protection you need. As you learn more about what these plans entail, you can decide whether one makes sense for you and your family.

An Overview of a Home Warranty Plan

A home warranty is a service plan that covers the repair and replacement of broken-down appliances and systems in your home and on your property. You purchase a plan in exchange for an agreement that a provider will make the repairs at no additional cost to you. Unlike insurance, which protects your home when a disaster or emergency happens, a warranty covers items that unexpectedly have mechanical issues or other problems. It will also take effect when there are problems with a covered item due to normal wear and tear, meaning you don’t have to wait until a catastrophe happens like you would with your homeowner’s insurance coverage. You’ll make a monthly or one-time payment to buy a warranty, and you’ll have coverage for a year. You can renew the warranty each year.

When to Buy It

If you purchase a brand-new home, the builder will typically provide a one-year warranty on appliances and other elements in the home. Such a warranty is not included if you buy an existing home, so you must purchase one at the time of closing if you want coverage from the time you move in. However, you can buy a home warranty at any time after you move in and have protection on items for the next year.

What it Covers

When you buy a warranty, you set up a contract with a service provider to repair inoperable items or install new ones. You can have protection for many important conveniences in the home, including plumbing, electrical, and heating and cooling systems. Your warranty can apply to appliances in your kitchen such as a dishwasher, stove and oven, refrigerator, garbage disposal, and microwave. It will protect you when your washer or dryer stops working or if your sprinkling system needs service, for example. Your home warranty can even apply to items such as a swimming pool.

What it Doesn’t Cover

Bear in mind that a home warranty plan will not be valid in every situation. If something breaks down because you failed to properly provide upkeep and maintenance, don’t expect coverage. Also, problems with appliances and systems due to improper installation or misuse will not have coverage. If you deliberately break or damage an item, the warranty will not cover any repairs or replacements. You should also know that if there are any pre-existing issues with something in your home at the time of the warranty purchase, that condition won’t have coverage.

Reasons a Home Warranty is Worth It

It’s no secret that fixing appliances and home systems can be pricey. Getting new ones is an even bigger cost. Not only are you paying for repairs or the new item, but you have to think about installation and labor costs, too. A home warranty can save you thousands in these situations. If an issue arises suddenly or during a time of financial hardship, you may not be in a position to afford these costs. Having this protection can provide peace of mind and reduce grief and worry. And if you’re not mechanically inclined, there’s no need to stress out about having to fix something yourself.

Drawbacks of a Home Warranty

A home warranty may not be worth it if you have brand-new appliances and systems in your home. In these cases, you might want to wait a couple of years to purchase a plan. Also, wait times for service can be long, which can add to the frustration of having to fix something you rely on every day. Because the warranty only lasts a year, it may not be right for you if you aren’t planning to remain in your home for too long.

If you own a home, you expect that important aspects of the property will have problems eventually. However, the costs to make repairs can be inconvenient or even impossible to manage. With a home warranty plan, you won’t have to worry about coming up with hundreds or even thousands of dollars to get something working properly again. In many situations, purchasing a plan makes a lot of sense.