A home warranty plan, also known as a home protection plan, is a service contract that offers homeowners a way to safeguard themselves against possible breakage or a malfunction within the home.

It's impossible to predict the future, which is why so many buyers look for that little extra peace of mind to comfort them when life unexpectedly throws them an unforeseen problem.

• Who Needs A Home Warranty Plan

Basically, anyone who purchases a home and is concerned with the cost of repairs should consider a home warranty plan. This is especially true of first-time home buyers who may not be familiar with home maintenance.

• Factoring In The Cost

When factoring in the potential cost of repairing a major appliance or other home component, a home warranty plan may not be a bad investment. The actual cost of warranty coverage will depend on the plan chosen and the items protected. As is the case with everything in life, it's best to shop around and compare prices.

• Who Pays For A Home Warranty Plan

As a buyer, you can order a home warranty plan in conjunction with the purchase of your home. However, some sellers or builders may include this type of offering as an incentive to attract potential buyers. In this case, the plan is yours at no additional cost.

• What's Covered & What's Not

Just like a car warranty, no two policies are the same. Coverage varies by location and issuer, and you want to choose a warranty plan that best suits your needs. Most basic plans cover a home's heating and cooling system, electrical system, plumbing, water heater and major appliances, including a dishwasher, range/oven/cooktop, garbage disposal, etc. Coverage does not apply to items that are misused or damaged, either intentionally or through negligence. Instead, most home warranty plans are designed to protect the homeowner from defects that result during the course of normal wear and tear.

When considering the purchase of a home warranty plan, review the complete contract and familiarize yourself with exactly what's covered under your policy. If you want an upgraded policy, don't hesitate to ask whether one is available. Most companies do not require a home inspection and will notify homeowners when their coverage is about to expire. The good news is that most policies are renewable.

The purchase of a home is a big step and it's likely to be the largest purchase you will ever make, so be sure to consider all of the options available to help protect yourself from costly repairs. Ask your REALTOR® for more information relating to available home warranty plans.